Iowa Administrative Code › Agency 199 - Utilities Division › Utilities and Transportation Divisions › Chapter 35 - Energy Efficiency and Demand Response Planning and Reporting for Natural Gas and Electric Utilities Required to Be Rate-regulated › Rule 199-35.2 - Definitions

Current through Register Vol. 47, No. 3, July 24, 2024
The following words and terms, when used in this chapter,
				  shall have the meanings shown below:
"Annual Iowa retail rate revenue "
means the
				  utility's expected revenue forecast based on customer growth rate, usage per
				  customer, volumes, margin rate, customer charge rate, and the cost of
				  generation or fuel.
"Assessment of potential"
means development
				  of cost-effective energy and capacity savings available from actual and
				  projected customer usage by applying commercially available technology and
				  improved operating practices to energy-using equipment and buildings and
				  considering market factors including, but not limited to, the effects of rate
				  impacts, the need to capture lost opportunities, the non-energy benefits of
				  measures, and the strategic value of energy efficiency and demand response to
				  the utility.
"Avoided cost"
means the cost the utility
				  would have to pay to provide energy and capacity from alternative sources of
				  supply available to utilities as calculated pursuant to subparagraphs
				  35.5(4)
"m "(7)
and 35.5(4)
"n"(4).
"Cost-effectiveness tests"
means one of the
				  five acceptable economic tests used to compare the present value of applicable
				  benefits to the present value of applicable costs of an energy efficiency or
				  demand response program or plan. The tests are the participant test, the
				  ratepayer impact test, the societal test, the total resource cost test, and the
				  utility cost test. A program or plan passes a cost-effectiveness test if the
				  cost-effectiveness ratio is equal to or greater than one.
"Customer incentive "
means an amount or
				  amounts provided to or on behalf of customers for the purpose of having
				  customers participate in energy efficiency programs. Incentives include, but
				  are not limited to, rebates, loan subsidies, payments to dealers, rate credits,
				  bill credits, the cost of energy audits, the cost of equipment given to
				  customers, and the cost of installing such equipment. Customer incentives do
				  not include the cost of information provided by the utility, nor do they
				  include customers' bill reductions associated with reduced energy usage due to
				  the implementation of energy efficiency programs. For the purposes of energy
				  efficiency pricing strategies, "incentive" means the difference between a
				  customer's bill on an energy efficiency customized rate and the customer's bill
				  on a traditional rate considering factors such as the elasticity of
				  demand.
"Demandresponse"
means changes in a
				  customer's consumption pattern in response to changes in the price of
				  electricity over time, or in response to incentive payments to induce reduced
				  consumption during periods of high wholesale prices or when system reliability
				  is jeopardized.
"Economic potential"
means the energy and
				  capacity savings that result in future years when measures are adopted or
				  applied by customers at the time it is economical to do so. For purposes of
				  this chapter, economic potential may be determined by comparing the utility's
				  avoided cost savings to the incremental cost of the measure.
"Energy efficiency measures"
means
				  activities on the customers' side of the meter which reduce customers' energy
				  use or demand including, but not limited to, end-use efficiency improvements or
				  pricing strategies.
"Energy savings performance standards "
means those standards which shall be cost-effectively achieved, with the
				  exception of programs for qualified low-income persons, tree-planting programs,
				  educational programs, and assessments of consumers' needs for information to
				  make effective choices regarding energy use and energy efficiency, and includes
				  the annual capacity savings stated either in kilowatt per day (kW/day) or in
				  dekatherm per day (dth/day) or in thousand cubic feet per day (Mcf/day) and the
				  annual energy savings stated in either kilowatt hour (kWh) or dth or Mcf
"Free riders"
means program participants who
				  would have implemented energy efficiency measures or practices even without the
				  program.
"Marginal energy cost"
means the cost
				  associated with supplying the next Mcf or dth of natural gas for a natural gas
				  utility and the energy or fuel cost associated with generating or purchasing
				  the next kWh of electricity for an electric utility.
"Market effects "
means a change in the
				  structure of a market or the behavior of participants in a market that is
				  reflective of an increase (or decrease) in the adoption of energy-efficient
				  products, services, or practices and is related to market intervention(s)
				  (e.g., programs).
"Net benefits "
means the present value of
				  benefits less the present value of costs as defined in the cost-effectiveness
				  test.
"Non-energy benefits"
means the many and
				  diverse benefits produced by energy efficiency in addition to energy and demand
				  savings as used and applied in the Iowa Technical Reference Manual. The
				  beneficiaries of these benefits can be utility systems, participants and
				  society.
"Participant test"
means an economic test
				  used to compare the present value of benefits to the present value of costs
				  over the useful life of an energy efficiency or demand response measure or
				  program from the participant's perspective. Present values are calculated using
				  a discount rate appropriate to the class of customers to which the energy
				  efficiency or demand response measure or program is targeted. Benefits are the
				  sum of the present values of the customers' bill reductions, tax credits,
				  non-energy benefits and customer incentives for each year of the useful life of
				  an energy efficiency or demand response measure or program. Costs are the sum
				  of present values of the customer participation costs (including initial
				  capital costs, ongoing operations and maintenance costs, removal costs less a
				  salvage value of existing equipment, and the value of the customer's time in
				  arranging installation, if significant) and any resulting bill increases for
				  each year of the useful life of the measure or program. The calculation of bill
				  increases and decreases must account for any time-differentiated rates to the
				  customer or class of customers being analyzed.
"Persistence of energy savings "
means the
				  savings due to changed operating hours, human behavior, interactive factors,
				  and the degradation in equipment efficiency over the life of the measure
				  compared to the baseline.
"Process-oriented industrial assessment"
means an analysis which promotes the adoption of energy efficiency measures by
				  examining the facilities, operations and equipment of an industrial customer in
				  which energy efficiency opportunities may be embedded.
"Ratepayer impact test"
means an economic
				  test used to compare the present value of the benefits to the present value of
				  the costs over the useful life of an energy efficiency or demand response
				  measure or program from a rate level or utility bill perspective. Present
				  values are calculated using the utility's discount rate. Benefits are the sum
				  of the present values of utility avoided capacity and energy costs (excluding
				  the externality factor) and any revenue gains due to the energy efficiency or
				  demand response measure or program for each year of the useful life of the
				  measure or program. Costs are the sum of the present values of utility
				  increased supply costs, revenue losses due to the energy efficiency or demand
				  response measures, utility program costs, and customer incentives for each year
				  of the useful life of the measure or program. The calculation of utility
				  avoided capacity and energy, increased utility supply costs, and revenue gains
				  and losses must use the utility costing periods.
"Societal test"
means an economic test used
				  to compare the present value of the benefits to the present value of the costs
				  over the useful life of an energy efficiency or demand response measure or
				  program from a societal perspective. Present values are calculated using a
				  12-month average of the 10-year and 30-year Treasury Bond rate as the discount
				  rate. The average shall be calculated using the most recent 12 months at the
				  time the utility calculates its cost-effectiveness tests for its energy
				  efficiency or demand response plan. Benefits are the sum of the present values
				  of the utility avoided supply, non-energy benefits, and energy costs including
				  the effects of externalities. Costs are the sum of the present values of
				  utility program costs (excluding customer incentives), participant costs, and
				  any increased utility supply costs for each year of the useful life of the
				  measure or program. The calculation of utility avoided capacity and energy and
				  increased utility supply costs must use the utility costing periods.
"Spillover (free drivers) "
means the
				  reduction in energy consumption or demand, or the reduction in both, caused by
				  the presence of an energy efficiency or demand response program, beyond the
				  program-related gross savings of the participants and without financial or
				  technical assistance from the program. The term "free drivers" may be used for
				  individuals who have spillover effects.
"Take-back effect"
means a tendency to
				  increase energy use in a facility, or for an appliance, as a result of
				  increased efficiency of energy use. For example, a customer's installation of
				  high-efficiency light bulbs and the subsequent longer operation of lights
				  constitutes "taking back" some of the energy otherwise saved by the efficient
				  lighting.
"Total resource cost test"
means an economic
				  test used to compare the present value of the benefits to the present value of
				  the costs over the useful life of an energy efficiency or demand response
				  measure or program from a resource perspective. Present values are calculated
				  using a 12-month average of the 10-year and 30-year Treasury Bond rate as the
				  discount rate. The average shall be calculated using the most recent 12 months
				  at the time the utility calculates its cost-effectiveness tests for its energy
				  efficiency or demand response plan. Benefits are the sum of the present values
				  of the utility avoided supply, energy costs, non-energy benefits, and federal
				  tax credits. Costs are the sum of the present values of utility program costs
				  (excluding customer incentives), participant costs, and any increased utility
				  supply costs for each year of the useful life of the measure or program. The
				  calculation of utility avoided capacity and energy and increased utility supply
				  costs must use the utility costing periods.
"Useful life "
means the number of years an
				  energy efficiency measure will produce benefits.
"Utility cost test"
means an economic test
				  used to compare the present value of the benefits to the present value of the
				  costs over the useful life of an energy efficiency or demand response measure
				  or program from the utility revenue requirement perspective. Present values are
				  calculated using the utility's discount rate. Benefits are the sum of the
				  present values of each year's utility avoided capacity, non-energy benefits,
				  and energy costs (excluding the externality factor) over the useful life of the
				  measure or program. Costs are the sum of the present values of the utility's
				  program costs, customer incentives, and any increased utility supply costs for
				  each year of the useful life of the measure or program. The calculation of
				  utility avoided capacity and energy and increased utility supply costs must use
				  the utility costing periods.