3 Introduction

The Reporting Requirements Manual Working Group and the Standardization Team created a joint subcommittee (the Joint RRM/ST Cost Effectiveness Subcommittee) to assure compliance with ordering paragraph (OP) 9 of Decision (D.) 01-12-020, December 11, 2001. OP 9 requires that the utilities:

"...evaluate the Low Income Energy Efficiency (LIEE) program and individual measures by calculating both the participant cost test and utility cost test, including in that calculation the non-energy related benefits developed by the RRM Working Group. The RRM Working Group and Standardization Project Team shall jointly develop recommendations, after obtaining public input, on:

· how each of these tests should be considered in making final measure selections, or in evaluating the overall effectiveness of LIEE programs from year to year or across utilities, and

· an explicit method for addressing the "gross" versus "net" costs and savings issue in measure and program evaluation.

The joint report shall include a discussion of the pros and cons of the various options considered."

The non-energy benefits (NEBs) developed by the RRM Working Group Cost Effectiveness Subcommittee are reported in the "Low-income Public Purpose Test (The LIPPT) Final Report", dated April 3, 2001. Conclusion of Law number 11 of Decision (D.) 01-12-020 stated, "The non-energy benefits developed by the Working Group and presented in Attachment 4 are reasonable and should be adopted".

The remainder of this report will cover the approaches used to meet the requirements of OP 9, the results of those analyses, and recommendations based on the analysis. The development of the findings in this report incorporated a public input process. In appropriate areas where the input from the public could not be reconciled with that of the Joint RRM/ST Cost Effectiveness Subcommittee, it has been noted.