§ 158-788. Development of demand-side program designs.

(a)

Each utility shall develop a comprehensive set of demand-side program designs, for possible inclusion in the preferred and alternative resource plans. All demand-side resources which passed the screening test shall be incorporated into one or more demand-side program designs.

(b)

Demand-side programs should be designed as either full-scale or pilot programs. A full-scale demand-side program may be implemented only when the demand-side resources have been proven to be cost-effective under the screening test using actual program costs and benefits from either the implementation of a pilot program in the utility's service territory or a transferable pilot or full-scale program in the service territory of another utility as input data.

(c)

For full-scale programs, alternative program designs shall be developed to realize the maximum cost-effective (including utility program administration costs) penetration of those demand-side resources passing the screening test. To the extent practicable and economically feasible, market penetration estimates shall be made for each program design based on varying levels and types of customer incentives to determine the appropriate incentive required to achieve maximum cost-effective penetration.

(d)

At least one demand-side program design shall also be developed for possible inclusion in the preferred and alternative resource plans to realize the maximum penetration for each cost-effective demand-side resource passing the screening test.

(e)

In developing a full spectrum of demand-side program designs, the utility shall consider the applicability of different types of actions within utility-sponsored programs to achieve maximum market penetration for each cost-effective demand-side resource. Types of action to be considered within utility-sponsored programs shall include at least the following:

(1)

Financial incentives for demand-side resource adoption, including:

a.

Rebates to customers or demand-side resource vendors;

b.

Customer bill credits and shared savings;

c.

Loans at no interest or below-market interest;

d.

Payments to customers or third parties based on estimated or measured energy and/or demand savings;

e.

Leasing of any energy efficient end-use equipment in the residential market and those commercial and industrial applications whereby the leasing process increase the rate of customer acceptance and where trade intermediaries (e.g., appliance dealers, contractors, materials suppliers, design professionals, etc.) have easy access to the leasing program and are not restrained in product selection except in regard to technical performance, efficiency standards, reliability, cost, etc.;

f.

Any combination of the above or other incentives as appropriate.

(2)

Installation of demand-side resources in customer premises at varying levels of cost to the customer, including no cost to the customer;

(3)

Information and education, including:

a.

Educational literature and advertising;

b.

On-site energy audits or surveys in customer premises;

c.

Technical assistance to consulting engineers, architects, contractors, builders, and developers;

d.

Other information as appropriate.

(4)

Building and equipment efficiency requirements as tariff conditions for the determination of hook-up fees for initiation of utility service to new or existing facilities.

(f)

Demand-side programs shall be designed to minimize cream skimming, lost opportunities and free riders, wherever feasible. Cream skimming is that instance in which only the most cost-effective demand-side resources are installed, or otherwise implemented at a customer's facility, and it then becomes uneconomical or impractical to return at a later time to that facility to obtain the next incremental demand-side resource. Lost opportunities occur when cost-effective energy-efficient measures are not installed owing to the absence of effective demand-side programs. Free riders are those customers who would have implemented a demand-side resource regardless of the utility demand-side program.

(g)

In the implementation of demand-side programs the utility shall not purchase, install, service or provide design services for hardware associated with demand-side programming unless it is determined that not doing so leads to inadequate penetration, inappropriate installation, or higher programs cost under the screening test.

(Code 1956, § 52-355(a))