23 CAR § 461-106. Benefit/cost tests

(a)(1) Administrators shall present sufficiently detailed calculations, sensitivity analyses, and supporting testimony of the effect of the proposed conservation and energy efficiency program using each of the following tests set forth in the California Standard Practice Manual: Economic Analysis of Demand-Side Programs and Projects (State of California, Governor’s Office of Planning and Research, July 2002): (A) The Participant Test; (B) The Ratepayer Impact Measure Test; (C) The Total Resource Cost Test; and (D) The Program Administrator Cost Test. (2)(A) The Arkansas Public Service Commission will rely on the formulae found in the manual. (B) However, the Arkansas Public Service Commission may rely on some inputs contained in the manual and not on others. (C) Furthermore, the costs and benefits contained in the manual are suggestions and are not endorsed by the Arkansas Public Service Commission for every program. (D) For this reason, the Arkansas Public Service Commission will not limit the costs and benefits that can be considered in the benefit/cost tests to those listed therein. (3) Cost-effectiveness results shall be presented on both a program and portfolio basis. (4) Administrators may submit additional economic analyses and benefit/cost test information in support of a proposed program. (b)(1) A utility shall use an evaluation period of either ten (10) years (a gas utility may use an evaluation period of fifteen (15) years), or the actual measure lives for each measure in a program to evaluate a program or program portfolio. (2) Results of the tests shall be presented: (A) Consistent with the descriptions shown in Table I; or (B) By other means as approved by the Arkansas Public Service Commission. TABLE I - Cost-Effectiveness Tests with Primary and Secondary Means of Expressing Test Results Participant Test Primary Secondary Net present value (all participants) Discounted payback (years) Benefit-cost ratio (“BCR”) Net present value (average participant) Ratepayer Impact Measure Lifecycle revenue impact per Unit of energy (kWh or therm) or demand customer (kW) Net present value Lifecycle revenue impact per unit Annual revenue impact (by year, per kWh, kW, ccf, or customer) First-year revenue impact (per kWh, kW, ccf, or customer) BCR Total Resource Cost Net present value (NPV) BCR Levelized cost (cents or dollars per unit of energy or demand) Societal (NPV, BCR) Program Administrator Cost Net present value BCR Levelized cost (cents or dollars per unit of energy or demand)