Definitions for Demand-Side Programs and Demand-Side Programs Investment Mechanisms

PURPOSE: This rule incorporates definitions for all terms used in 4 CSR 240-20.093 Demand-Side Programs Investment Mechanisms (DSIM) and 4 CSR 240-20.094 Demand-Side Programs. (1) As used in 4 CSR 240-20.093 and 4 CSR 240-20.094, the following terms mean: (A) Annual report means a report of information concerning a utility’s demand-side programs having the content described in 4 CSR 240-20.093(9); (B) Approved demand-side program means a demand-side program or program pilot which is approved by the commission in accordance with 4 CSR 240-20.094 Demand-Side Programs; (C) Avoided costs or avoided utility costs means the cost savings obtained by substituting demand-side programs for existing and new supply-side resources. Avoided costs include avoided utility costs resulting from demand-side programs’ energy savings and demand savings associated with generation, transmission, and distribution facilities including avoided probable environmental compliance costs. The utility shall use the integrated resource plan and risk analysis used in its most recently adopted preferred resource plan to calculate its avoided costs; AND INSURANCE (D) Baseline demand forecast means a reference forecast of summer or winter peak demand at the customer class level and on the customer side of the meter, excluding the effects of any new demand-side programs but including the effects of naturally-occurring energy efficiency and any codes and standards that were in place and known to be enacted at the time the forecast is completed; (E) Baseline energy forecast means a reference forecast of energy at the customer class level and on the customer side of the meter, excluding the effects of any new demand-side programs but including the effects of naturally-occurring energy efficiency and any codes and standards that were in place and known to be enacted at the time the forecast is completed; (F) Cost recovery amount means the amount approved by the commission in a utility’s filing for demand-side program approval or a DSIM rate adjustment case to provide the utility with cost recovery of demand-side program costs based on the approved cost recovery component of a DSIM; (G) Cost recovery component of a DSIM means the methodology approved by the commission in a utility’s filing for demand-side program approval to allow the utility to receive recovery of costs of approved demand-side programs with interest; (H) Customer class means major customer rate groupings such as residential, small general service, large general service, and large power service; (I) Deemed savings means the estimated measure-level annual energy savings and/or demand savings documented or calculated in the approved technical resource manual, technical reference manual (TRM), or statewide TRM, multiplied by the documented measure count. The demand-side program deemed savings is the sum of the deemed savings for all measures installed in a demand-side program. The demand-side portfolio deemed savings is the sum of all demand-side program deemed savings; (J) Demand means the rate of electric power use over an hour measured in kilowatts (kW); (K) Demand response means measures that decrease peak demand or shift demand to off-peak periods; (L) Demand-side portfolio means all of a utility’s demand-side programs at a defined point in time; (M) Demand-side program means any program conducted by the utility to modify the net consumption of electricity on the retail customer’s side of the electric meter, including, but not limited to, energy efficiency measures, load management, demand response, and interruptible or curtailable load, but not including deprivation of service or low-income weatherization; (N) Demand-side programs investment mechanism, or DSIM, means a mechanism approved by the commission in a utility’s filing for demand-side program approval to encourage investments in demand-side programs. The DSIM may include: a program cost recovery component of a DSIM, a throughput disincentive component of a DSIM, and an earnings opportunity component of a DSIM; (O) Demand savings target means the demand savings level approved by the commission under 4 CSR 240-20.094(4)(I) or 4 CSR 240-20.094(5)(A)5. Demand savings targets are the baseline for determining the utility’s demand-side portfolio’s demand savings performance levels for the earnings opportunity component of a DSIM; (P) DSIM amount means the sum of the program cost recovery amount, throughput disincentive amount, and earnings opportunity amount; (Q) DSIM rate means the rate used to determine the charge on customers’ bills for the portion of the DSIM amount assigned by the commission to a rate class; (R) Earnings opportunity amount means the amount approved by the commission in a utility’s filing for demand-side program approval or a rate adjustment case to provide the utility with an earnings opportunity amount based on the approved earnings opportunity component of a DSIM; (S) Earnings opportunity component of a DSIM means the methodology approved by the commission in a utility’s filing for demand-side program approval to allow the utility to receive an earnings opportunity. Any earnings opportunity component of a DSIM shall be implemented on a retrospective basis, and all energy and demand savings used to determine a DSIM earnings opportunity amount shall be verified and documented through EM&V reports; (T) Economic potential means energy savings and demand savings relative to a utility’s baseline energy forecast and baseline demand forecast, respectively, resulting from customer adoption of all cost-effective measures, regardless of customer preferences; (U) Electric utility or utility means any electric corporation as defined in section 386.020, RSMo; (V) Energy means the total amount of electric power that is used over a specified interval of time measured in kilowatt-hours (kWh); (W) Energy efficiency means measures that reduce the amount of electricity required to achieve a given end-use; (X) Energy savings target means the energy savings level approved by the commission under 4 CSR 240-20.094(4)(I) or 4 CSR 240-20.094(5)(A)6. Energy savings targets are the baseline for determining the utility’s demand-side portfolio’s energy savings performance levels for the earnings opportunity component of a DSIM; (Y) Evaluation, measurement, and verification, or EM&V, means the performance of studies and activities intended to evaluate the process of the utility’s program delivery and oversight and to estimate and/or verify the estimated annual energy and demand savings, and to report on the benefits, cost effectiveness, and other effects from demand-side programs, based on those estimated and/or verified energy and demand savings; (Z) Filing for demand-side programs approval means a utility’s filing for establishment, modification, or discontinuance of demand-side program(s) which may also include a simultaneous request for the establishment, modification, or discontinuance of a DSIM; (AA) General rate proceeding means a general rate increase proceeding or complaint proceeding before the commission in which all relevant factors that may affect the costs or rates and charges of the electric utility are considered by the commission; (BB) Interruptible or curtailable rate means a tariffed rate under which a customer receives a reduced charge in exchange for agreeing to allow the utility to withdraw the supply of electricity under certain specified conditions; (CC) Market potential study means a quantitative analysis of the amount of energy and demand savings that may exist, is cost-effective, and could be realized through the implementation of demand-side programs, policies, and rate design; (DD) Market transformation means the strategic process of intervening in a market to create lasting change in market behavior by removing identified barriers or exploiting opportunities to accelerate the adoption of all cost-effective demand-side savings as a matter of standard practice; (EE) Maximum achievable potential means energy savings and demand savings relative to a utility’s baseline energy forecast and baseline demand forecast, respectively, resulting from expected program participation and ideal implementation conditions. Maximum achievable potential establishes a maximum target for demand-side savings that a utility can expect to achieve through its demand-side programs and involves incentives that represent a very high portion of total programs costs and very short customer payback periods. Maximum achievable potential is considered the hypothetical upper-boundary of achievable demand-side savings potential, because it presumes conditions that are ideal and not typically observed; (FF) Measure means any device, technology, behavioral response mechanism, or operating procedure that makes it possible to deliver the same or better levels of energy service while— 1. Using less electricity than would otherwise be required to achieve a given end-use; or 2. Altering the time pattern of end-use electricity so as to decrease peak demand or shift demand to off-peak periods; (GG) MEEIA means the Missouri Energy Efficiency Investment Act, section 393.1075, RSMo; (HH) Net benefits means the program benefits measured and documented through EM&V reports, TRMs and statewide TRM, less the sum of the program costs including the design, administration, delivery, end-use measures, incentive payments to customers, EM&V, utility market potential studies, and statewide TRM or TRM and statewide TRM; (II) Non-Energy Benefits means— 1. Direct benefits to participants in utility demand side programs, including, but not limited to, increased property values, increased productivity, decreased water and sewer bills, reduced operations and maintenance costs, improved tenant satisfaction, and increases to the comfort, health, and safety of participants and their families; 2. Direct benefits to utilities, including, but not limited to, reduced arrearage carrying costs, reduced customer collection calls/notices, reduced termination/reconnection costs, and reduced bad debt write-offs; or 3. Indirect benefits to society at large, including, but not limited to, job creation, economic development, energy security, public safety, reduced emissions and emission related health care costs, and other environmental benefits; 4. Non-Energy Benefits may be included in the total resource cost test (TRC) only if they result in avoided utility costs that may be calculated with a reasonable degree of confidence. Non-energy benefits may always be considered in the societal cost test.; (JJ) Participant costs test (PCT) means a test of the cost-effectiveness of demand-side programs that measures the economics of a demand-side program from the perspective of the customers participating in the program; (KK) Preferred resource plan means the utility’s resource plan that is contained in the resource acquisition strategy most recently adopted by the utility’s decision-makers in accordance with 4 CSR 240-22; (LL) Probable environmental compliance costs means the costs to the utility of complying with new or additional environmental legal mandates, taxes, or other requirements that, in the judgment of the utility’s decision-makers, may be reasonably expected to be incurred by the utility and are included in the integrated resource plan and risk analysis used in its most recently-adopted preferred resource plan; (MM Program pilot means a demand-side program designed to operate on a limited basis for evaluation purposes before full implementation; (NN) Ratepayer impact measure (RIM) test is a measure of the difference between the change in total revenues paid to a utility and the change in total cost incurred by the utility as a result of the implementation of demand-side programs. The benefits are the avoided costs as a result of implementation. The costs consist of incentives paid to participants, other costs incurred by the utility, and the loss in revenue as a result of diminished consumption, and the utility’s earnings opportunity as a result of implementation of demand-side programs. Utility costs include the costs to administer, deliver, and evaluate each demand-side program and the costs of statewide TRM or TRM and statewide TRM; (OO) Realistic achievable potential means energy savings and demand savings relative to a utility’s baseline energy forecast and baseline demand forecast, respectively, resulting from expected program participation and realistic implementation conditions. Realistic achievable potential establishes a realistic target for demand-side savings that a utility can expect to achieve through its demand-side programs and involves incentives that represent a moderate portion of total program costs and longer customer payback periods when compared to those associated with maximum achievable potential; (PP) Societal cost test means the total resource cost test with the addition of non-energy benefits; (QQ) Staff means all personnel employed by the commission, whether on a permanent or contract basis, except: commissioners; commissioner support staff, including technical advisory staff; personnel in the secretary’s office; and personnel in the general counsel’s office, including personnel in the adjudication department. Employees in the staff counsel’s office are members of the commission’s staff; (RR) Technical potential means energy savings and demand savings relative to a utility’s baseline energy forecast and baseline demand forecast, respectively, resulting from a theoretical construct that assumes all feasible measures are adopted by customers of the utility regardless of cost or customer preference; (SS) Technical resource manual, technical reference manual or TRM means a document used to quantify energy savings and demand savings attributable to energy efficiency and demand response programs within an electric utility’s service territory. The TRM may be a statewide or utility-specific document that is approved by the commission; (TT) Throughput disincentive means the electric utility’s lost margin revenues that result from decreased retail sales volumes due to its demand-side programs; (UU) Throughput disincentive amount means the amount approved by the commission in a utility’s filing for demand-side program approval or a DSIM rate adjustment case to provide the utility with recovery of throughput disincentive based on the approved throughput disincentive component of a DSIM; (VV) Throughput disincentive component of a DSIM means the methodology approved by the commission in a utility’s filing for a demand-side program approval to allow the utility to receive recovery of throughput disincentive with interest; (WW) Total resource cost test or TRC means a test that compares the sum of avoided utility costs, including avoided probable environmental costs to the sum of all incremental costs of end-use measures that are implemented due to the program (including both utility and participant contributions), plus utility costs to administer, deliver, and evaluate each demand side program and costs of statewide TRM or TRM and statewide TRM; and (XX) Utility cost test (UCT) means a test that compares the AND INSURANCE sum of avoided utility costs, including avoided probable environmental costs, to the sum of all incremental costs of end use measures that are implemented due to the program, excluding participant contributions, plus utility costs to administer, deliver, and evaluate each demand-side program and costs of statewide TRM or TRM and statewide TRM. (2) Upon request and for good cause shown, the commission may grant a variance from any provision of this rule. AUTHORITY: section 393.1075.11, RSMo 2016.* This rule originally filed as 4 CSR 240-20.092. Original rule filed Dec. 27, 2016, effective Oct. 30, 2017. Moved to 20 CSR 4240-20.092, effective Aug. 28, 2019. *Original authority: 393.1075, RSMo 2009.