95- 648 C.M.R. ch. 2, § 5

Current through 2024-51, December 18, 2024

Section 648-2-5 - THRESHOLD CRITERIA FOR PROPOSAL SCREENING

A. Programs or Projects Designed to Reduce Electricity Consumption

1. Modified Societal Test. Eligibility to be considered for funding pursuant to section 4(A) of this Chapter for a program or project designed to reduce kilowatt-hour consumption shall be determined by means of this subsection. Electricity conservation programs that are reasonably likely to have a positive net present value will be deemed to have passed the threshold test for eligibility to compete for funding by the Trust. Costs and benefits will be considered regardless of whether they are paid or experienced by the participant, the Trust or any other individual, business, government agency or other entity.

2. Program Benefits. The test that is applicable for screening applications for Trust funding is a modified societal test under which program benefits include, without limitation, the following:

a. Electric generation costs that will not be incurred as a result of the program or project. These include energy and capacity costs, using estimates of market prices and adjusting for line losses. These estimates may be differentiated by time periods that influence market prices, including but not limited to peak and off-peak periods and summer and winter periods;

b. Transmission and distribution costs that will not be incurred as a result of the program or project, using estimates of transmission and distribution utility marginal transmission and distribution costs. These estimates may be differentiated by time periods that influence costs;

c. Fossil fuel costs that will not be incurred as a result of the program or project, using estimated savings in oil, gas or other fossil fuel use at estimated fossil fuel prices;

d. Other resource benefits, such as reduced water and sewer costs; and

e. Non-resource benefits such as reduced operations and maintenance costs, job training opportunities and workforce development, general economic development and environmental benefits, to the extent that such benefits can be accurately and reasonably quantified and attributed to the program or project.

3. Program Costs. Program costs will include the following:

a. Direct program costs, including program design, administration, implementation, marketing, evaluation and other reasonably identifiable costs associated with the program or project;

b. Measure costs, such as the incremental costs of an energy efficiency measure, including installation, over an equivalent baseline measurement, in the case of new construction or replacement programs. In the case of retrofit programs, measure costs are the full costs of the energy efficiency measure, including installation, less any salvage value for the replaced measure; and

c. Ongoing customer costs, including costs such as increased operation and maintenance costs and lost economic development opportunities, to the extent that such costs can be accurately and reasonably quantified and attributed to the program or project.

4. Net Present Value. Satisfaction of the modified societal test shall be determined based on the net present value of the costs and benefits over the expected life of each measure. The discount rate used for present value calculations shall be the current yield of long-term U.S. Treasury securities (ten years or more), adjusted for inflation.

5. Post-program effects. For those programs or projects that are expected to influence the development of self-sustaining markets, calculations under this section will be for a reasonable additional period after the program is terminated in order to capture post-program market effects.

B. Programs or Projects Designed to Reduce Greenhouse Gas Emissions

1. Modified Societal Test. Eligibility to be considered for funding pursuant to section 4(A) of this Chapter for fossil fuel conservation programs shall be determined by this subsection. Fossil fuel conservation programs and projects that are reasonably likely to have a positive net present value will be deemed to have passed the threshold test for eligibility to compete for funding by the Trust. Costs and benefits will be considered regardless of whether they are paid or experienced by the participant, the Trust or any other individual, business, government agency or other entity.

2. Program Benefits. The test that is applicable for screening applications for Trust funding is a modified societal test under which program benefits include, without limitation, the following:

a. Reduced greenhouse gas emissions measured in reductions by ton in loading of carbon dioxide or other greenhouse gases in the atmosphere from locations in the State;

b. Fossil fuel costs that will not be incurred as a result of the program or project, using estimated savings in oil, gas or other fossil fuel use, at estimated fossil fuel prices;

c. Other resource benefits, such as the value of reduced water and sewer costs and reduced electrical consumption; and

d. Non-resource benefits, such as reduced operations and maintenance costs, job training opportunities and workforce development, general economic development and environmental benefits, to the extent that such benefits can be accurately and reasonably quantified and attributed to the program or project.

3. Program Costs. Program costs will be the same as identified in subsection (A)(3) of this section.

4. Net Present Value. Satisfaction of the modified societal test shall be determined in a manner identical to subsection (A)(4) of this section.

5. Post-Program Effects. Post-program effects will be determined in a manner identical to subsection (A)(5) of this section.

95- 648 C.M.R. ch. 2, § 5