Projected Benefits

The CPUC hired an independent consultant, Energy and Environmental Economics, Inc. (E3) to assist with development of avoided cost estimates for use in cost-effectiveness evaluations of energy efficiency and demand-side management programs. The CPUC recently approved the avoided cost estimates proposed in the E3 Methodology And Forecast Of Long Term Avoided Costs For The Evaluation Of California Energy Efficiency Programs, and will consider whether these inputs may also be applicable for renewable and distributed generation programs. Our staff report utilizes avoided costs⁵ for purposes of estimating Year 1 CSI program benefits, and presents a range of incentive costs based on the next available ERP (2.80/watt) and SGIP (3.00/watt) incentive levels.

Item and assumption	Estimate
Estimated average installed capacity per year	300 MW
Summer avoided costs per MWh Peak Partial-peak	$225/MWh $78/MWh
Partial peak avoided cost per winter MWh	$72/MWh
Average assumed summer operating hours: Peak Partial-peak	1,325 1,960
Assumed average winter operating hours	1,900
Total MWh savings	450
Total summer benefits (one year)	$ 39 million
Total winter benefits (one year)	$ 12 million
Total annual benefits	$ 51 million
Technology Life (years)	20
Total benefits over life of units	$1.02 billion

The scenarios contained in this report are proposals only, and will be adjusted to reflect the solar valuation methodology adopted by the CPUC.

⁵ E3 report, pp.192-193.