Benefit-Cost Analysis of Distributed Energy Resource Investments

Join a training course for evaluation practitioners on the purpose, process and key considerations in benefit-cost analysis (BCA) — also referred to as “cost-effectiveness testing” — of single and multiple distributed energy resource (DER) investments. DERs can include energy efficiency, demand response, distributed storage and solar, and building and transportation electrification. Attendees will delve into practical application of key concepts in BCA using the National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources (NSPM).

This training will consist of three modules, each two hours, starting with a review of key economic principles and framework for conducting BCAs, how to develop a primary cost-effectiveness test and approaches to quantifying DER impacts, options for presenting BCA results that are clear and help to inform a jurisdiction’s priority goals and objectives, and differentiating between BCA and other analyses that help to inform DER investment decisions.

Day One: BCA Principles and Framework

• Brief overview – purpose of BCAs
• BCA principles and framework
• Fundamental principles for benefit-cost analysis
• Cost-effectiveness testing and perspectives
• BCA in different regulatory contexts
• Overview of key BCA components: utility system impacts (electric and gas); non-utility system impacts (other fuels, host customer, and societal)
• Key steps to developing a jurisdiction’s primary cost-effectiveness test

Day Two: Developing a Primary Cost-Effectiveness Test and Quantifying Impacts

• Developing a primary cost-effectiveness test (continued): how to identify relevant DER impacts; applying key BCA principles to inform the primary test
• Quantifying BCA impacts: key steps to quantifying impact values – overview; methods for quantifying impacts, including hard-to-quantify impacts; resources to help quantify impacts
• BCA Testing across different DERs: relevance of impacts for some types of DERs/use cases and examples

Day Three: Presenting BCA Results (And Other Analyses) that Can Inform Decisions

• Presenting BCA results: Examples of how to present BCA results and interpreting/using results
• BCA v. other analyses that can inform DER investment decisions: examples include rate, bill and participation impact analyses; economic development and job analyses; and analysis of the distribution of DER impacts across different customer groups.