Ordering Paragraph 14: Incremental Measure Cost (IMC)

Ordering Paragraph 14 provides:

"The utilities shall develop, with interested stakeholders, in a public process, 1) protocols, including mechanism and standards, for the collection and use of incremental Measure Cost (IMC) data, including the use of a statewide database such as Database for Energy Efficiency Resources (DEER); 2) guidelines or standards for estimating IMC costs associated with the various program strategies and elements, including possible default assumptions; 3) other mitigations, or avenues to ensure that the cost-effectiveness calculations are reasonable where credible IMC is not available, such as those set forth in Policy Rule V-4. The utilities shall attempt to have at least a preliminary agreement in place prior to filing PY 2001 applications. The utilities' PY 2001 applications shall report on the development of IMC standards and protocols, use uniform, agreed upon IMC for like measures, and explain the basis for any deviations."

The parties agree that costs for individual energy-efficiency measures should be obtained from any one of the following: a) the most recent Measure Cost Study (MCS); or b) data collection and estimation processes equivalent or superior to those used in the most recent Measure Cost Study for similar measures; or c) appropriate analysis of normalized costs obtained from program participation records (usually for retrofit, i.e., full-cost measures only); or if none of the above are available; d) secondary sources, such as other industry research studies, if they have publication dates of 1996 or later. The parties further agree that per unit measure costs will be developed and reported on an ex ante basis and that reported per unit measure costs will be the same as forecasted.

While not comprehensive, and subject to the limitation that the CEC's updated DEER database is not yet available, the parties' agreement is a good first step, which should be sufficient to guide planning for PY 2001. The parties note that it was developed in parallel with the DEER Update 2001 Study. The parties should continue working on developing better protocols for the collection and use of IMC data, default assumptions, and other mitigations to ensure that the cost-effectiveness calculations are reasonable where credible IMC is not available, such as those set forth in Policy Rule V-4.

The parties state that the Discussion Paper incorporates feedback from the public workshop. However, Appendix 5 appears to only contain the draft. The utilities should serve on the service list the updated Discussion Paper No. 5 no later than November 1, 2000.

The utilities' PY 2001 Applications should identify the cost basis used for each energy efficiency measure proposed, together with supporting documentation.