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The Societal Test can be expressed as follows: B/C (societal) = B, + C, (4-31) Where: C,=CNi,l{[DCi+UC,+(C,& +(1+d$) = societal benefit = societalcost = change in energy use in year i for fuelj = marginal cost of energy in year i = direct costs of consumer’s participation in year i = directcostsofutility’sparticipationinyeari = externalorindirectbenefitsinyeari = external or indirect costs in year i = societal discount rate (usually assumed to equal the utility’s discount rate) = number of years. Since its beginnings, DSM has evoked arguments concerning the appropriate screening analysis criteria in the selection of programs. A large portion of the debate pits the advocates of the RIM test against the advocatesoftheTRCtest. Actually,theselectionofDSMprogramsrequiresconsiderationofbothtests because DSM programs need to address the twin goals of efficiency and equity. EPRI proposes the following sequential methodology for the selection of DSM programs: Eliminate all programs that do not pass the TRC Test. Implement all programs that pass the RIM Test. Redesign the remaining programs that pass the TRC Test but fail the RIM Test, to minimize their impact on nonparticipants. The explanations and definitions provided in this section for the use of B/C analysis with IRP have been brief. This section is included in the manual to provide analysts with an awareness of IRP and B/C analysesinactualpractice. Formoreinformation,pleaserefertoPrincipEesandPracticeofDemand-Side Management (EPRI 1993). Consumer/Producer Surplus Introduction The implications of research, development, and demonstration (RD&D) and other policy actions of the DOE Office of Energy Efficiency and Renewable Energy extend beyond the results that may be recorded in a conventional economic analysis, which usually is confined to evaluating the direct impacts on the provider and user of an energy service. There are potential environmental impacts, national security 69PDF Image | A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies
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