Final Report for

LIEE Program and Measure Cost Effectiveness

(in response to D. 01-12-020, ordering paragraph #9)

Submitted by:

Cost Effectiveness Subcommittee of the RRM Working Group and Standardization Project Team

March 28, 2002

Table of Contents

Page

1 Executive Summary 1

2 Introduction 4

3 Methodology 5

3.1 Cost Effectiveness Tests for LIEE Program 5

3.2 Cost Effectiveness Test for LIEE Program Measures 8

4 Results & Recommendations 17

4.1 Cost Effectiveness Results of the LIEE Program 17

4.2 Cost Effectiveness Results of LIEE Program Measures 18

4.3 Decision Making with Cost Effectiveness Tests 22

4.4 "Gross" versus "Net" Issues 27

4.5 Recommendations 28

Appendix A Non-energy Benefits Used in Calculations 29

Appendix B Program Level Results with and without NEBs 37

Appendix C Results of Measure Specific Cost Effectiveness Tests 40

Appendix D Results of Different Allocation Method 41

Appendix E Participants of Public Workshop 43

Appendix F Formulas for Cost Benefit Analyses 49

Table of Exhibits

Page

Exhibit 1.1 Cost Effectiveness Test Results for the LIEE Program 1

Exhibit 3.1 Energy Rates Used in Participant Cost Tests 6

Exhibit 3.2 Example of Weighting Method - Simple Association 9

Exhibit 3.3 Illustration of Allocation Method 10

Exhibit 3.4 Measure Assessment/Decision Rules for Retention/Addition 14

Exhibit 4.1 Cost Effectiveness Test Results for the LIEE Program 18

Exhibit 4.2 PG&E Measure Test Results - Most to Least Effective 19

Exhibit 4.3 SCE Measure Specific Test Results - Most to Least Effective 20

Exhibit 4.4 SDG&E Measure Specific Test Results - Most to Least Effective 21

Exhibit 4.5 SoCalGas Measure Specific Test Results - Most to Least Effective 22

Exhibit 4.6 Decision Making for Measures Using Recommended Method 25

1