Energizing the Energy Policy Process: The Impact of Evaluation

By Roberta W. Walsh; John G. Heilman | Go to book overview
grams are designed to mitigate those factors. A customer will participate when some but not necessarily all of these factors are eliminated or overcome. The cost of the remaining factors should be included as a cost of the program. 2

Including the above benefits and costs in the TRC test will make it a true measure of the efficiency of DSM programs. Ideally, this test -- the "enhanced" TRC test, or the customer value or value test -- should be used instead of the TRC test in the DSM selection methodology presented previously. The value test does not solve the problem of equity, but it does ensure that DSM is economically efficient.


CONCLUSION

In conclusion, no one test is the correct test to be used in the selection of DSM programs. Each represents a different point of view and has different efficiency and equity considerations that cannot be ignored. The methodology presented provides simple guidelines to enable DSM choices to be made that promote the achievement of both goals.

The words of cost-effectiveness enlightenment are thus: The DSM forest is not best defined by a single cost-effectiveness test tree.


NOTES
1.
An earlier version of this chapter appears on pp. 333-337 of Proceedings, energy program evaluation: Conservation and resource management, Chicago, Illinois, 1989.
2.
For more information on these missing benefit and cost components, the derivation of this test, how to begin to measure these components, and the implications of including these additional benefits and costs please see Herman and Chamberlin, 1993.

-51-

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