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Ratepayer impact Measure Test: Nonparticipant Perspective The Ratepayer Impact Measure (RIM) Test is a measure of the difference between the change in total revenuespaidtoautilityandthechangeintotalcostspaidbyautility. Ifthechangeinrevenuesislarger or smallerthanthe change in total costs (RI),then rate Levels have to change because of the program. This test is also called the Nonparticipant Test. The RIM Test can be expressed as follows: RIM Test = Br+C,, (4-27) Where: Br Cr Ii = consumerelectricityrateinyeari d = discount rate CR, B , = E N i z[ l( i E i * M C J 4 ( 1 + a ) ’ ] Cr= CNi,l{(Ii+UCi+ai*CRi)+(1 +d)i} = ratepayer resource benefit = ratepayer resource cost = participantchangeinelectricityuseinyeari = incentives received by participant in year i UC, = direct costs of utility’s participation in year i AEi MC, = marginal cost of electricity in year i N = number of years. For example, assume the same parameters as those in the TRC Test example. The RIM Test for this example is calculated as follows. RIM Test = $441.60 f $888.80 = 0.49 (4-28) Where: B,=C1oi=[(l,OOO kWh/yex*$0.06/kWh)+(1+0.06)’]=$441.60 C,= $200 + $100 + cloi[(=1,0l00 kWWyear * $O.OS/kWh) f (1 + 0.06)’]= $888.80 The RIM Test B/C ratio is less than 1, thus, this DSM program is not cost-effective from the ratepayer perspectivebecauseratelevelswillincreaseasaresultofthisprogram. Ifconsumerelectricityratesare higher than marginal electricity costs, few programs pass this test. In dollar terms, the two largest components of this test are the changes in supply costs and the changes in total revenues. If rates are higher than marginal costs, the benefit of avoided supply costs is overshadowed by the cost of revenue losses. Utility Cost Test: Utility Perspective On the utility side, a DSM program could alter the daily operation of generation and, ultimately, could changethegeneration,transmission,anddistributionsystemsandadministrationpractices. Thebenefits from the utility perspective are the avoided supply costs resulting fkom program implementation. The costs associated with the program can be characterized as customer incentives and direct utility participation costs. 67PDF Image | A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies
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