GUIDELINES FOR THE DEVELOPMENT
AND MAINTENANCE OF MEASURE COSTS
AND BENEFITS ESTIMATION METHODS
November 2011
Prepared for:
The Regional Technical Forum
Navigant Consulting, Inc.
1990 N. California Blvd., Suite 700
Walnut Creek, CA 94596
Phone: 925.935.0270
Fax: 925.935.0290
www.navigant.com
© 2011 Navigant Consulting, Inc.
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Table of Contents
1
Purpose and Scope ............................................................................................................. 1
1.1 Key Terms ....................................................................................................................................................... 1
1.2 Guidelines Overview..................................................................................................................................... 2
2
Measure Costs and Benefits Analysis and Reporting Requirements ......................... 3
2.1
2.2
2.3
2.4
2.5
2.6
3
Measure Specification ................................................................................................................................... 3
Element Identification ................................................................................................................................... 3
Element Analysis ........................................................................................................................................... 3
Reporting Requirements ............................................................................................................................... 4
Analysis Expectations ................................................................................................................................... 4
Statistical and Rigor Requirements ............................................................................................................. 4
Estimation Procedures – Capital Costs ........................................................................... 5
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4
Material ........................................................................................................................................................... 5
Ancillary Material .......................................................................................................................................... 6
Disposal ........................................................................................................................................................... 7
Labor ................................................................................................................................................................ 7
Design and Engineering ................................................................................................................................ 9
Permitting and Licensing .............................................................................................................................. 9
Markups .......................................................................................................................................................... 9
Delivery ......................................................................................................................................................... 10
Estimation Procedures – Maintenance .......................................................................... 11
4.1
4.2
4.3
4.4
5
Introduction .................................................................................................................................................. 11
Ongoing Maintenance – Labor ................................................................................................................... 11
Ongoing Maintenance – Material .............................................................................................................. 11
Ongoing Maintenance – Disposal .............................................................................................................. 11
Estimation Procedures – Operations ............................................................................. 12
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Introduction .................................................................................................................................................. 12
Electricity and Natural Gas ........................................................................................................................ 12
Propane, Heating Oil, and Wood .............................................................................................................. 13
Other Fuel ..................................................................................................................................................... 13
Water ............................................................................................................................................................. 13
Consumable Materials................................................................................................................................. 14
Consumable Disposal .................................................................................................................................. 15
6
Estimation Procedures – Ancillary Impacts ................................................................. 16
7
Measure Economic Maintenance ................................................................................... 17
ii
7.1 Measure Economic Analysis Lifetime ....................................................................................................... 17
7.2 Cross-Measure Standardization Spreadsheet(s) ...................................................................................... 17
8
RTF Process for Specifying Measure Economic Elements ......................................... 18
9
Measure Economic Element Analysis Methods .......................................................... 19
9.1 Data Cleaning ............................................................................................................................................... 19
9.2 Estimation Approaches ............................................................................................................................... 19
10
Appendix I: Data Sources and Justification for Source Selection ............................. 22
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
Regional Sales (Price and Volume) ..................................................................................................... 22
In-Store Retail ........................................................................................................................................ 23
Contractor and Project Invoices .......................................................................................................... 23
Online Retail .......................................................................................................................................... 24
Built-Up Cost Analysis ......................................................................................................................... 25
Contractor Interview ............................................................................................................................ 25
Distributor Interview ............................................................................................................................ 26
Program Tracking Data ........................................................................................................................ 27
Additional Professional and Industrial Market Actor and Program Administrator Interviews 27
RS Means or Other Secondary Sources .............................................................................................. 27
Analyst Estimates .................................................................................................................................. 28
Maintenance Staff Interviews .............................................................................................................. 28
Justification for Source Selection ......................................................................................................... 28
Appendix II: Measure Economic Element Reference Sheet ................................................ 30
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1
Purpose and Scope
This document provides guidelines for the development of estimates of the quantifiable, monetizable costs
and benefits of energy efficiency measures. These guidelines provide a systematic approach to developing
estimates and documenting approaches and sources. It is intended to supplement the Guidelines for RTF
Savings Estimation Methods and Guidelines for RTF Measure Lifetime Estimation Methods, which together are
used to determine the cost-effectiveness of energy efficiency measures.
1.1
Key Terms
The following terms are used throughout this document.
» Measure Costs and Benefits – The quantifiable, monetizable impacts that result from an energy
efficiency measure. For Regional Technical Forum (RTF) purposes, these have been categorized as
capital cost, operations, maintenance, and ancillary impacts. “Measure Costs and Benefits” refers to
the incremental effects of a conservation measure, relative to the baseline action.
» Measure Costs and Benefits Element – Discreet measure monetizable impacts that may have
unique methodologies for estimation of values. Values may be either positive (cost) or negative
(benefit) for each individual element, depending on the measure.
» Element Type – A categorization of measure costs and benefits elements specific to a measure. For
example, an element might be classified as residential or commercial, depending on the measure.
Each element has an associated list of element types, and each element type has an associate priority
list of data sources.
» Measure Costs and Benefits Analysis – The full analysis of all measure costs and benefits elements,
including documentation of data sources, methods, and justification for all elements not evaluated.
Cross-Measure Standardization – The information (for example, values, data sets, data sources,
and/or analysis methods) that is standard across many measure assessments. These data are
developed, organized, and maintained by the RTF and stated in the RTF Measure Costs and Benefits
Standard Information Workbooks.
» Measure Costs and Benefits Checklist – A checklist developed together with these guidelines to
facilitate the systematic analysis of measure economics described here. The analyst can use the
checklist to document elements analyzed, data sources used, and justification for not analyzing
elements and/or using higher priority data sources.
» Incremental Effects – The effect of implementing a conservation measure, relative to the baseline
activity (i.e., not implementing the conservation measure). The following baseline conditions are
defined in the Guidelines for RTF Savings Estimation Methods and are considered within these
guidelines:
o Current Practice – Existing equipment or configuration has no remaining useful life.
Incremental cost is defined as the difference between the cost of the standard efficiency
installation or replacement and the measure.
o Pre-Condition – Existing equipment or configuration still has significant remaining useful
life. The baseline conditions assume that no installation would occur and therefore no cost is
incurred. Incremental cost is defined as the full cost of the measure installation.
1
1.2
Guidelines Overview
This document defines each of the identified measure costs and benefits elements, along with their
respective requirements for documentation, data source use, and other methods for determining measure
costs and benefits estimates. More specifically, this document provides:
» Section 2 – A description of the measure costs and benefits analysis process
» Sections 3 through 6 – For each measure costs and benefits element:
o A prioritization of data sources and description of analysis approaches
o Specification of all data, sources, and justifications required
o Identification of cross-measure standardization of values, data sets, data sources, and
analysis methods
» Section 7 – Maintenance of measure costs and benefits analyses and cross-measure standardized
data
» Section 8 – The RTF process for modifying the measure costs and benefits element set
» Section 9 – A discussion on the appropriate use of data cleaning and analysis methods
»
2
2
Measure Costs and Benefits Analysis and Reporting Requirements
This section summarizes the RTF measure costs and benefits analysis and reporting requirements. Analysis
begins with the clear specification of the measure (including the baseline) and the identification of relevant
measure costs and benefits elements. For each relevant element, the guidelines are then used to select data
sources and analysis methods. Finally, analysis is documented, including the completion of the RTF Measure
Costs and Benefits Checklist.
2.1
Measure Specification
The measure economic analysis begins with the statement of baseline and measure characteristics, which
should match those provided for the energy savings analysis. 1
2.2
Element Identification
The analyst shall then consider each costs and benefits element enumerated in these Guidelines and identify
all elements relevant to the measure. The RTF Measure Costs and Benefits Checklist may be used to facilitate
this process.
Each element has associated element types. For example, for many elements there are Unit Energy Savings
(UES) and Standard Protocol types that reflect the classification of the measure energy savings. Each type
may have a different priority list of data sources. Therefore, depending on the element type, an element may
have different preferred analysis methods for different measures.
The elements presented within these guidelines are not exclusive and the user may recommend additional
elements to be considered for a specific measure economic analysis. The RTF may accept these additional
proposed elements if quantifiable, monetizable estimates of impacts can be reliably provided.
2.3
Element Analysis
For each element (or grouping of elements) assessed, the analyst should complete the following actions:
1) Identify the element type, as described in these guidelines for each specific element.
2) Select the data source from the priority list of data sources provided in the Guidelines in the
subsection covering the element in question. Section XX describes and discusses each of these
sources.
3) Select an analysis method.
4) Conduct the analysis.
Guidelines for the Development and Maintenance of RTF Savings Estimation Methods
http://www.nwcouncil.org/energy/rtf/subcommittees/deemed/Guidelines%20for%20RTF%20Savings%20Esti
mation%20Methods%20(Release%206-1-11).pdf
1
3
2.4
Reporting Requirements
The measure costs and benefits analysis should be included in the measure assessment workbook, as should
the Measure Costs and Benefits Checklist.
» Measure costs and benefits analyses should include raw and cleaned data sets and a clear
description of the cleaning process. Each step of the analysis should be clearly labeled.
» The checklist should contain the following items:
o A summary of elements analyzed and excluded
o Justification for elements not considered (not applicable, assumed to have a negligible
incremental impact, or included in an aggregate analysis of multiple elements)
o A summary of data sources used for each element and justification for not using higher
priority data sources, where applicable
o A justification for analysis methodology for each element
o Documentation of the analysis and summary of results (including any specifications for how
analysis and results are presented)
o Estimate of element value and data disposition from which to gauge uncertainty in the
estimate
2.5
Analysis Expectations
The intent of these guidelines is to standardize the process by which measure economic estimates are
developed and to make the analyses transparent to the RTF. The RTF does not expect each element to be
thoroughly and individually analyzed for each measure:
» For most measure assessments, the majority of measure elements will be excluded, typically because
there is no incremental impact of a particular element or the expected impact is negligible relative to
other economic impacts.
» In many cases, economic elements will be analyzed in groups (for example, contractor interviews or
project invoices may be used to determine full capital costs), and a single estimate will be provided
for the entire group of elements.
2.6
Statistical and Rigor Requirements
The RTF requires the measure costs and benefits analysis and the analysis of each measure economic element
to be unambiguous estimates. It is left to the discretion of the RTF to determine the adequacy of rigor for
each measure costs and benefits analysis. The analyst is required to provide the documentation of data
sources, methods, and estimates of uncertainty2 necessary for the RTF to make these determinations.
Although acceptable levels of uncertainty are not set for the elements, providing the RTF with the inputs to gauge
uncertainty is necessary.
2
4
3
Estimation Procedures – Capital Costs
Capital costs are the incremental costs incurred in the acquisition and installation of an energy-efficient
measure, relative to the stated baseline. This section describes measure economic elements that comprise
capital costs, and the element-specific methods for determining their values. Capital costs comprise the
following measure economic elements:
» Material
» Ancillary material
» Disposal
» Labor
» Design and engineering
» Permitting/licensing
» Markups
» Delivery
Sales tax is not considered in RTF measure economic analyses because the societal total resource cost test—
which the RTF uses to determine cost-effectiveness—is not affected by this type of transfer within a society.
The following sections discuss each of the capital cost measure economic elements.
3.1
Material
Material refers to the primary equipment installed for the baseline and measure.
3.1.1
Element Types and Priority List of Data Sources
The Material measure costs and benefits element for a measure can be classified as either “UES” or
“Standard Protocol” based on the measure type defined by the Guidelines for RTF Savings Estimation Methods.
» UES – These measures tend to have easily identifiable traits, installations are independent of the site,
and equipment contains no major sub-components. The following is the priority list of data sources
for UES Capital Costs:
o Regional sales (price and volume)
o In-store retail
o Contractor invoices
o Online retail
o Built-up cost analysis
» Standard Protocol – These measures tend to have materials that contain sub-components that can
vary the resulting efficiency and energy consumption characteristics, and installations and resulting
performance are site-specific and/or dependent on site conditions. The following is the priority list of
data sources for Standard Protocol Capital Costs:
o Contractor interviews
o Distributor interviews
o Contractor and project invoices
o Program tracking data
5
o
3.1.2
Additional professional and industrial market actors and program administrators
Cross-Measure Standardization
No Materials information is standardized across measures.
3.2
Ancillary Material
Ancillary material refers to the components and consumables required to complete the proper installation of
equipment and systems. Ancillary material does not include the capital cost of the actual measure or the
labor costs associated with the installation.
Examples of ancillary materials include wiring, exhaust/flue piping, pipe solder, fasteners (e.g., nails,
screws), adhesives or sealants (e.g., glue, caulk, and spray foam), equipment mounting materials (e.g.,
footings, anchors, and concrete), or cleaning supplies.
Ancillary materials are associated with the installation and not the ongoing maintenance. Ongoing
maintenance material and labor are covered under separate measure economic elements.
Ancillary material incremental impacts reflect the differences in requirements and practices for those
installations. For example, for gas water heaters, changing from a standard unit to a condensing unit may
require condensate drains and a condensate-resistant flue pipe.
3.2.1
Element Types and Priority Lists of Data Sources
The Material measure costs and benefits element for a measure can be classified as either “UES” or
“Standard Protocol” based on the measure type defined by the Guidelines for RTF Savings Estimation Methods.
» UES – These measures tend to have easily identifiable traits, installations are independent of the site,
and equipment contains no major sub-components. The following is the priority list of data sources
for UES Ancillary Material Costs:
o Contractor invoices
o On-site installer interview or documentation review
o Retail (in-store and online)
» Standard Protocol – These measures tend to have materials that contain sub-components that can
vary the resulting efficiency and energy consumption characteristics, and installations and resulting
performance are site-specific and/or dependent on site conditions. The following is the priority list of
data sources for Standard Protocol Ancillary Material Costs:
o Contractor interviews
o Contractor invoices
o Interviews with additional professional and industrial market actors and program
administrators
3.2.2
Cross-Measure Standardization
Ancillary costs are not standardized across measures.
6
3.3
Disposal
Disposal refers to the removal, hauling, and discarding or recycling of existing equipment or by-products of
new equipment installations. Disposal does not include any disposal associated with the ongoing
maintenance of the measure. For example, the cost of replacement and disposal of spent air filters in heating,
ventilating, and air-conditioning (HVAC) equipment is covered under other measure economic elements.
This does not include demolition or any of the labor associated with activity required to complete the
measure installation.
When considering between disposal types, the least expensive option should be assumed unless the measure
includes the specification of a particular disposal/recycle process, in which case the cost of that process
should be used. For example, recycling costs should be counted if recycling is required as a measure
specification.
Disposal costs should not differentiate between different disposal times for baseline and measure activities.
For example, for early replacement measures, if a disposal would occur at a later date in the baseline case (at
the end of useful life), then that disposal cost should be subtracted from the disposal cost for the measure
case. No value shall be given to delaying the disposal cost in the baseline case. Therefore, disposal impacts
should only be addressed in cases where implementation of a conservation measure results in a change in
disposal requirements—either in quantity of method of disposal. For example, an appliance recycling
measure may incur recycling costs that exceed the standard disposal costs for baseline appliances.
3.3.1
Element Types and Priority Lists of Data Sources
There is a single element type: Disposal. The following is the priority list of data sources for this element:
» Contractor invoices
» Contractor interviews
» Additional professional and industrial market actors and program administrators
3.3.2
Cross-Measure Standardization
Disposal costs are not standardized across measures.
3.4
Labor
Labor is the direct effort associated with the installation of equipment and systems, provided by either hired
contractors or in-house staff. Labor analysis details should identify the steps taken or the practices used to
install both basic installations and complex systems including their individual components. Labor is
typically estimated in units of time (for example, man-hours), to which standard labor rates are applied.
Labor pertains to the direct effort associated with the installation and impacts that may be incurred when
installations are conducted by hired contractors or in-house staff:
» Hired contractors – Labor hours include those hours for the contractors associated with the
installation (i.e., the same hours that would appear on a customer invoice). While overhead may be
included in their labor rates, the overhead associated with managers or other support staff that is not
directly involved with the installation should not be included in the labor cost estimate.
» In-house staff – The hours worked and hourly rates of the staff directly involved with the
installation should be counted. The labor of other support staff, such as supervisors not directly
involved with the installation, should not be included.
7
Labor costs are typically arrived at by multiplying labor units of time by a wage rate that is
appropriate for the trade or person performing the task, as discussed in section 3.4.2.
3.4.1
Element Types and Priority Lists of Data Sources
The labor measure costs and benefits element for a measure can be classified as either “UES” or “Standard
Protocol” based on the measure type defined by the Guidelines for RTF Savings Estimation Methods.
» UES – These measures tend to have easily identifiable traits, installations are independent of the site,
and equipment contains no major sub-components. The following is the priority list of data sources
for UES Labor hours:
o Contractor invoices
o RS Means and other secondary sources
o Analyst estimates
» Standard Protocol – These measures tend to have materials that contain sub-components that can
vary the resulting efficiency and energy consumption characteristics, and installations and resulting
performance are site-specific and/or dependent on site conditions. The following is the priority list of
data sources for Standard Protocol Labor costs:
o Contractor interviews
o Additional professional and industrial market actors and program administrators
3.4.2
Cross-Measure Standardization
Labor rates ($/hour) are standard across all measures and can be found in [RTF MEASURE ECONOMIC
STANDARD DATA SPREADSHEET]. The RTF develops these labor rates through a survey of contractors
and technicians. Weightings within categories are also developed by the RTF (for example, percentage of
rural contractors and percentage of urban contractors). These values are updated every two years.
[SUBCOMMITTEE SHOULD PROVIDE FEEDBACK ON THIS PARAGRAPH]
Labor rates and their associated weightings can also be used to develop costs for specific market subsets. For
other labor rates such as rates for in-house staff, the analyst may present proposed rates to the RTF for
consideration and approval. [Discuss additional requirements/analysis needed to justify rates.]
Classifications for rates include:
» Residential
o Electricians
o HVAC technicians
o Plumbers
o Residents
o Other3
» Commercial and Industrial
o Electricians
o HVAC technicians
o Plumbers
o Other
3
Other may include in-house staff rates that may vary for different organizations and industries.
8
3.5
Design and Engineering
Design and Engineering is the design and specification of project details.
3.5.1
Element Types and Priority Lists of Data Sources
There is a single element type for this element: Design and Engineering. Contractor interviews and invoices
are the recommended data sources for this element. Interviews are preferable, given the complexity of this
element.
3.5.2
Cross-Measure Standardization
No information for Design and Engineering is standardized across measures.
3.6
Permitting and Licensing
Permitting and licensing refers to the fees paid to a municipality in order to install equipment. This element
is highly variable across jurisdictions. If the impact of this element is not negligible, a broad data collection
effort is required to capture the variability in permitting and licensing fees across the region.
3.6.1
Element Types and Priority Lists of Data Sources
There is a single element type for this element: Permitting and Licensing. Contractor interviews and invoices
are the recommended data sources for this element. Interviews are preferable, given the complexity of this
element.
3.6.2
Cross-Measure Standardization
The information for Permitting and Licensing is not standardized across all measure assessments and
therefore should be considered on a case by case basis.
3.7
Markups
Markups are the additions to the cost of an item applied at various transaction points in the product delivery
stream from manufacturer to purchasing end user. Where material and ancillary material costs are not
collected from the perspective of the end user (e.g., wholesale distributor pricing and retail pricing for
contractor-installed products), markups may need to be applied to costs to reflect the true cost to the end
user.
3.7.1
Element Types Priority Lists of Data Sources
There is a single element type for this element: Markups. Standard markup assumptions provided by the
RTF should be used.
3.7.2
Cross-Measure Standardization
Due to difficulties in collecting markup data from retailers and contractors, the RTF maintains standard
markup rate assumptions by product type and distribution and delivery methods. This data is reviewed by
the RTF every two years.
9
3.8
Delivery
Delivery impacts arise from the costs incurred to deliver material and ancillary material to the site of
installation, for example shipping costs, or delivery fees from a retailer.
3.8.1
Element Types Priority Lists of Data Sources
There is one element type: Delivery. The following is a prioritized list of data sources for delivery costs:
» Program tracking database
» Invoices
» Analyst estimates
3.8.2
Cross-Measure Standardization
No information for Delivery is standardized across measures.
10
4
4.1
Estimation Procedures – Maintenance
Introduction
Maintenance is broadly defined as the “performance of routine, preventive, predictive, scheduled and
unscheduled actions aimed at preventing equipment failure or decline with the goal of increasing efficiency,
reliability, and safety.” 4 The measure economic maintenance elements are:
» Ongoing maintenance – labor
» Ongoing maintenance – materials
» Ongoing maintenance – disposal
The definitions and analysis methods for these elements are similar to the labor and ancillary materials
elements in the Capital Cost category (Section 9).
4.2
Ongoing Maintenance – Labor
The cost of labor can be quantified using the same sources and methods described in Section 3.4, Labor. For
ongoing maintenance, an additional data source would be interviews with maintenance staff at sites where
the measure (or similar measure) has been installed.
4.3
Ongoing Maintenance – Material
The cost of materials for ongoing maintenance can be quantified using the same sources and methods
described in Section 3.2, Ancillary Material. For ongoing maintenance, an additional data source would be
interviews with maintenance staff at sites where the measure (or similar measure) has been installed.
4.4
Ongoing Maintenance – Disposal
The cost of disposing of spent materials can be quantified using the same sources and methods described in
Section 3.3, Disposal. For ongoing maintenance, an additional data source would be interviews with
maintenance staff at sites where the measure (or similar measure) has been installed.
There may be ambiguity between disposal costs in this Maintenance Category and the Operations Category
of measure economic elements. In these cases, to avoid double counting, analysts should select one category
to place these costs under and make this decision clear in the RTF Measure Economics Checklist.
4
U.S. Department of Energy, http://www1.eere.energy.gov/femp/pdfs/omguide_complete.pdf
11
5
5.1
Estimation Procedures – Operations
Introduction
For the purposes of these guidelines, “operations” are defined broadly as all economic impacts arising from
energy and material consumed or disposed of as the result of normal use of the equipment addressed by the
measure. This includes impacts from energy consumption, non-energy consumables (for example, water, or
soap), and disposal of spent materials (for example, oil or refrigerant). The measure economic operations
elements are:
» Electricity
» Natural gas
» Propane
» Heating oil
» Wood
» Other fuel
» Water
» Consumable materials
» Disposal
5.2
Electricity and Natural Gas
These elements address the economic impact of changes in electricity and natural gas consumption.
5.2.1
Element Types and Priority Lists of Data Sources
Each element has a single element type: Electricity and Natural Gas, respectively. All electricity and natural
gas costs should be obtained from the RTF.
5.2.2
Cross-Measure Standardization
Electricity and natural gas prices are standardized across measures. The RTF uses estimates of forecast
wholesale electricity and natural gas prices derived from the most recent power plan of the Northwest
Power and Conservation Council. The estimates vary by the time of day and the month of the year, and by
year for a 20-year forecast period. These estimates are reviewed and adopted by the RTF upon Council
adoption of a new or updated Regional Power Plan. Gas and electricity cost inputs used by the RTF are
documented in the 'MC_and_LOADSHAPE' workbook.
RTF economic analysis of measures includes many other factors for which inputs are derived from the most
recent Council plan. These include an estimate of a risk mitigation credit that reflects the long-run cost of
new generating resources and the range of uncertainties for all key determinants of electricity market prices
including costs of fuel, capital, carbon taxes, loads, hydro conditions, and others. RTF economic analysis of
measures takes into account when the energy is saved, line losses, the value of deferred transmission and
distribution capacity, the Regional Act Credit, and a series of financial assumptions for cost and term of
measure financing. Details for these assumptions can be found in the ProCost workbooks and the
'MC_and_LOADSHAPE' workbooks used by the RTF.
12
5.3
Propane, Heating Oil, and Wood
Incremental impacts on propane, heating oil, and wood consumption are captured by these three elements.
5.3.1
Element Types and Priority Lists of Data Sources
For each of these elements, there are two element types:
» Residential
» Commercial/Industrial
All propane, heating oil, and wood costs should be obtained from the RTF Measure Economic Standard Data
Spreadsheet.
5.3.2
Cross-Measure Standardization
Propane costs ($/gallon), heating oil costs ($/gallon) and wood costs ($/cord) are standard across all measures
and can be found in the RTF Measure Economic Standard Data Spreadsheet. Costs and their associated
weightings can also be used to develop costs for specific market subsets.
The RTF develops these costs through a survey of regional marginal costs. Weightings within categories are
also developed by the RTF (for example, percentage of rural residential customers and percentage of urban
residential customers). These values are updated every year.
5.4
Other Fuel
The economic impacts of any fuels not explicitly listed as measure economic elements are captured here.
5.4.1
Element Types and Priority Lists of Data Sources
There is a single element type: Other fuel. Given the open-ended nature of this element, data sources cannot
be recommended.
5.4.2
Cross-Measure Standardization
Given the open-ended nature of this element, there is no cross-measure standardization.
5.5
Water
Water refers to cost or savings due to the incremental change in water consumed by the end user as a result
of the energy efficiency measure. This measure economic element only includes the full cost or cost savings
of water paid for by the end user. The energy analysis should not include any embedded energy implications
of water consumption, as this would result in a double counting of the value of that embedded energy (once
as the value of energy savings in the energy analysis and a second time a part of the total water costs).
For measure analyses in which the energy analysis includes the change in water consumption resulting from
the measure, the calculated volume can be multiplied by the cost of water (e.g., $/gallon) to arrive at the total
water impact. For those energy analyses without water volume already calculated, the Energy Guidelines
13
(Guidelines for the Development and Maintenance of RTF Savings Estimation Methods) should be followed to
develop that volume change estimate.
The cost per gallon associated with water accounts for both freshwater supply and wastewater. For
residential and commercial applications, separate wastewater impacts should not be calculated. For
agriculture, separate water and wastewater impacts can be calculated as these may not necessarily be
coupled in all applications.
Water impacts should only be considered where there is a substantial change in water consumption as a
result of different operating characteristics between baseline and efficient measure equipment.
5.5.1
Element Types and Priority Lists of Data Sources
The water measure economic element can be classified as residential, commercial, or agricultural. Subclassifications for each sector are:
» Region [RTF/SUBCOMMITTEE TO HELP DEFINE REGIONS]
» Rural/urban
All water costs ($/gallon) should be obtained from the RTF Standard Measure Economic Data Spreadsheet.
5.5.2
Cross-Measure Standardization
Water costs ($/gallon) are standard across all measures and can be found in [RTF MEASURE ECONOMIC
STANDARD DATA SPREADSHEET]. Costs and their associated weightings can also be used to develop
costs for specific market subsets.
The RTF develops these costs through a survey of regional marginal costs. Weightings within categories are
also developed by the RTF (for example, percentage of rural residential customers and percentage of urban
residential customers). These values are updated every two years. [SUBCOMMITTEE SHOULD PROVIDE
FEEDBACK ON THIS PARAGRAPH]
5.6
Consumable Materials
Materials that are not explicitly listed as measure economic elements are captured here. One example of this
would be clothes washing soap: the difference in soap consumption (type or quantity) between types of
washing machines (e.g., top vs. front loaded) and/or temperature settings (e.g., cold vs. hot water washing).
The cost of materials for operations can be quantified using the same sources and methods described in
Section 3.2, on Capital ancillary materials.
5.6.1
Element Types and Priority Lists of Data Sources
See Section 3.2, Ancillary Material. An additional data source would be interviews with maintenance staff at
sites where the measure (or similar measure) has been installed.
5.6.2
Cross-Measure Standardization
Given the open-ended nature of this element, there is no cross-measure standardization.
14
5.7
Consumable Disposal
The cost of disposing of spent materials can be quantified using the same sources and methods described in
Section 3.3. There may be ambiguity between disposal costs in this Operations Category and the
Maintenance Category of measure economic elements. In these cases, to avoid double counting, analysts
should select one category to apply these costs, and make this decision clear in the RTF Measure Economics
Checklist.
5.7.1
Element Types and Priority Lists of Data Sources
See Section 3.3 on Capital disposal. An additional data source would be interviews with maintenance staff at
sites where the measure (or similar measure) has been installed.
5.7.2
Cross-Measure Standardization
See Section 3.3.
15
6
Estimation Procedures – Ancillary Impacts
Ancillary impacts are defined as any effects, positive or negative, that result from an energy efficiency
measure that are not captured through the energy analysis or the categories of capital costs, operations, and
maintenance. Common measure economic elements include:
» Building Owner
o Building value
o Rent premiums
» Building Operator
o Equipment downtimes
o Renewable energy credits
o Resale of on-site generation
» Business
o Marketing and public relations
o Productivity
o Absenteeism
o Attracting and retaining top tenants and employees
» Building Occupants
o Occupant comfort
o Occupant illness
o Indoor environmental quality
» Utility
o Reduced customer calls, shutoffs, and reconnections for delinquency
o Reduced cost collection activities
o Reduced arrearages and carrying costs for arrearages
» Societal
o Income generated from measure installation
o Avoided costs for unemployment benefits
o Reduced heat island effect
Conclusive estimates of the monetary impact of these elements do not generally exist. Therefore, the RTF
does not consider these elements further in this document. Instead, an analyst may choose to include
ancillary impacts in their analysis if they can demonstrate that these impacts are significant, quantifiable, and
monetizable for the measure in question.
16
7
Measure Economic Maintenance
This section discusses the maintenance of data and analyses required to keep RTF measure economic
analyses current. This pertains to both current RTF-approved analyses as well as RTF cross-measure
standardized data.
7.1
Measure Economic Analysis Lifetime
When a measure’s economics are expected to change rapidly, the RTF may accept a measure analysis with a
measure economics sunset date earlier than the energy analysis sunset date. In these cases, the RTF should
specify what part of the measure economic analysis needs to be updated (e.g., material cost). The most
common reasons for requiring updates are:
» Emerging technologies: Capital costs and possibly maintenance cost are declining quickly enough to
affect the cost-effectiveness. In these cases, product cost data will likely need to be re-collected.
» Commodity-based sensitivities: measures that are highly dependent on commodity (e.g., copper,
steel, and aluminum) costs (e.g., motors) may fluctuate dramatically enough to affect costeffectiveness during the lifetime of the measure analysis. In these cases, the level of effort specified
by the RTF to update costs for existing approved measures should be minimal. Where possible,
economic data can be updated by applying appropriate scaling factors, such as a Producer Price
Index5, Consumer Price Index6, or ratio of current and historical costs for similar products.
7.2
Cross-Measure Standardization Spreadsheet(s)
The RTF is responsible for maintaining the data provided in the RTF Measure Economics Standard Datasets
workbook. This workbook includes individual worksheets for each measure economic element, addressing
relevant standardized data across measures, such as values, data sets, data sources, and methods. Each sheet
includes the data sources, data, methods, and data vintages used to develop the standardized information, as
well as a recommended sunset date for the information. The RTF should review this workbook annually and
prioritizes standardized information to update or add.
5
6
Bureau of Labor Statistics. Producer Price Indexes. http://www.bls.gov/ppi/
Bureau of Labor Statistics. Consumer Price Indexes. http://www.bls.gov/cpi/
17
8
RTF Process for Specifying Measure Economic Elements
As new measures, analysis methods, and data sources arise, the elements, as defined in this document, may
require revision or deletion. The categorization of elements might also be revised. Changes should most
commonly be made at the element level, rather than to an entire category or subcategory of elements. For
elements that the RTF chooses to include, the RTF should provide the following items:
» A description of the element
» A priority list of data sources
» The specification of what should be standardized across measures (e.g,, values, data sets, data
sources, analysis methods)
» Identification of the person or entity that will be tasked with developing the standardized
information and updating the RTF Measure Economics Standard Information Workbooks
» Specification of how often the standard information should be updated
» The reason for inclusion of a new element and the intended purpose and use
18
9
Measure Economic Element Analysis Methods
This section provides guidance on methods used for measure economic element analysis. Analysis begins
with the review and cleaning of data sets, and is followed by the execution of an estimation method.
9.1
Data Cleaning
Raw data sets should be reviewed and cleaned before being analyzed. Cleaning steps include:
» Formatting – Ensuring that records are formatted or consistency. Common formatting activities
include converting numbers stored as text into numerical entries and standardizing the spelling and
wording of categories.
» Treatment of incomplete records – Incomplete records should be identified and addressed.
Typically, incomplete records are discarded if any of the missing fields are used in the analysis.
» Removal of duplicate records – Duplicate records should be identified and removed. In some data
sets, near duplicate records may exist. The analyst must then decide whether to remove near
duplicates or not.
» Identification and treatment of outliers – Outliers are observations that are abnormally far from
other values in the data set. Outliers may be naturally occurring or due to error in data entry and/or
conversion. Naturally occurring outliers can arise from atypical circumstances at the source of the
record (e.g., extremely high measure installation costs at a hazardous site). The outliers may be
included; removed if comparable values are not anticipated in measure implementation (e.g.,
program participation is unlikely where installation costs would be very high); or removed if the
measure specifications are tightened to exclude likely causes of the outlying data. Formal tests such
as the Grubbs’ Test (for testing for a single outlier) and the Tietjen-Moore Test (for testing for
multiple outliers) can be used to identify true statistical outliers in data sets.
Both raw and cleaned datasets should be provided in the measure economic analysis, along with a
description of all cleaning activities. The description should be clear enough for a reviewer to reproduce the
cleaned dataset from the raw dataset.
9.2
Estimation Approaches
There are various analytical methods for estimating measure economic element impacts from relevant data
sets. Estimation methods include:
» Arithmetic mean (average)
» Weighted average
» Median
» Regression
» Custom measures
9.2.1
Arithmetic Mean
This approach averages all observations into a single point estimate and represents the middle or expected
value of a data set. It is most appropriate when the data set represents a random sample, and an estimate of
19
the expected value in the underlying population is desired. Provided that the data is a random sample, an
unbiased estimate of average cost is produced.
There are limitations to using an arithmetic mean. This methodology does not identify cost-influencing
parameters (e.g., special features, efficiency level), although this level of cost modeling may not be necessary.
Also, skewed distributions and outliers can influence this method. Despite this, the arithmetic mean
approach can be very useful and give representative results so long as the sample is clearly defined and
restrictive (e.g., specific model numbers, specific cost resource).
9.2.2
Weighted Average
The weighted average assigns more weight, or importance, to certain data points. This approach is most
appropriate when the data set is not a random sample from the underlying population, and the analyst
wishes to obtain the expected value of the population. By weighting observations according to their
frequency in the population, the analyst can construct an unbiased estimate of the population average, such
as an unbiased estimate of average capital costs in the population. Weights can be defined as market
variables (e.g., market share of a particular manufacturer, equipment size) or cost influential feature sets
(e.g., distribution of stainless-steel models, distribution of efficiencies) and are used to derive the weighted
average cost. This results in the observations with higher weight contributing more to the final weighted
average than the observations with a low weight.
Like the arithmetic mean method, the weighted average approach can be influenced by outliers and skewed
distributions. Outlying data points and skewed distributions should be checked for when using the
weighted average method.
9.2.3
Median
Where outlying values are present, using a median value may be more representative of a population’s
central tendency. However, precisely because it is not influenced by outliers, it does not communicate
asymmetry in the extremes of the sample distribution. For example, the median of the data series 1, 2, 3, 40,
50 is the same as the median of the data series 1, 2, 3, 4, 5 (median = 3).
Median values can also be used together with the sample average to communicate the degree of skew in the
sample distribution, and, therefore provide a good summary check of whether outliers are asymmetrically
clustered on one end of the distribution.
9.2.4
Regression Modeling
Regression modeling can be used to disaggregate cost effects of energy from non-energy features and to
determine the effect of observable characteristics on the mean value of the measure element cost. If a sample
is not randomly selected, regression modeling can still generate unbiased mean values of Y conditional on
observable variables X, if the sample selection process is itself random conditional on a subset of X, such as
would occur in stratified random sampling.
Regression modeling expresses a variable as a function of observable characteristics and an error term. For
measure economic analysis, the specific measure cost “Y” is typically expressed as a function of a set of
variables “X” affecting cost (e.g., efficiency, unit size). For instance, the linear model takes the form,
20
𝑌 = 𝛼 + 𝛽𝑋 + 𝜀,
(1)
where 𝛼 is a constant, β is a set of unknown parameters, and 𝜀 is an error term. Using available cost data, the
function parameters β are estimated according to a specified criterion, such as minimizing the sum of
squared deviations between the actual value of Y and the predicted value of Y. (This is called “ordinary least
squares” regression.)
Conceptually, regression analysis is related to the arithmetic mean. For a given data set, the average value of
Y can be obtained from the following regression:
𝑌 = 𝛼 + 𝜀,
(2)
in which case 𝛼 is the mean value of Y in the data set. By comparison, estimating the regression equation in
(1) generates the average value of Y conditional on X: 𝑌̅ = 𝛽𝑋. In other words, regression analysis is preferred
to the arithmetic mean if the analyst is interested not just in the overall mean, but in how the mean is
conditioned by variables X.
To be done properly, regression requires more statistical sophistication on the part of the analyst than other
approaches require.
9.2.5
Controlling For Non--Energy Features
Material and other costs may be influenced by non--energy features in ways that cannot be addressed by
regression analysis. One example is when the available data does not indicate non-energy features or does
not indicate them consistently. Another example is when there is a strong correlation between the non-energy features and the efficiency level of products, such as some kitchen appliances. In these cases, the
analyst should make a reasonable attempt isolate the effect of the change in efficiency level. This may be
achieved by estimation methods such as using a minimum bid or price, rather than an average, or using the
average price of the lowest quartile of data points, rather than the average of the full data set.
9.2.6
Custom Cost Estimates
In instances where a measure is technically complex, the “Custom” approach may be appropriate. Custom
cost estimates may be used when equipment or system configurations are of a unique nature and require
cost estimate “built up” for the specific technical details of the measure and project. The process is somewhat
subjective and often relies on limited installation data; this method is prone to estimate variability.
21
10 Appendix I: Data Sources and Justification for Source Selection
10.1 Regional Sales (Price and Volume)
Applicable measure cost and benefits elements: Material, basic.
The most accurate data source for estimating material costs are sales price and sales volume data for the
equipment recently purchased in the region. Sale prices typically reflect the actual costs paid by end users
and are thus, the most reliable. Sales volumes provide the weighting necessary for the most accurate results.
When using this approach, further analysis of markups is not required. Regional sales data also aid other
research efforts and market characterizations such as defining fuel uses, equipment sizings, and
manufacturer/brand preferences.
The most commonly available source of regional sales data is in the form of utility program tracking data.
This information can be coupled with data from other sources to offer analysis that is specific to a particular
program. Utility program tracking data may include customer invoices that can provide information specific
to installations in addition to purchases. Note that baseline data may not be available when using program
tracking data.
If program tracking data is used, the program delivery mechanism should be identified before analysis is
conducted. The program delivery mechanism dictates how information is collected within the tracking data
and provides context for understanding the values. For example, tracking data for an upstream prescriptive
rebate would include wholesale data while a direct install program would most likely source information
from a contractor prior to the application of a customer markup. In cases where program tracking data is
unavailable, point of sale data can be used as a proxy for regional sales.
Point of sale data can also be gathered from stores. This type of information provides volume and market
share data. However, obtaining it from stores requires establishing and maintaining a strong relationship
with store staff.
The following presents a summary of potential strengths and weaknesses of in-store retail data:
In-store retail data strengths:
» Local/regional retail prices paid by customers for both measure and base equipment
» Interviews with store staff can be developed as well and structured to gain additional information.
For example, market weighting data from sales volume information
» Easy to identify and establish sources
» Data is available over time to support price trending.
In-store retail data weaknesses:
» Requires significant resources (e.g., staff travel, time at stores) to gather information
» Cost updates will require significant resources
» Limited to simple measures
» No labor/installation information
» Shelf surveys yield no sales volume weighting. This assumes all observed items are purchased in the
same volumes.
22
10.2 In-Store Retail
Applicable measure economic elements:
» Material, basic
» Ancillary material, basic
» Ongoing maintenance – material, basic
» Consumable materials, basic
For items available at retail stores, a survey of stores can be conducted to collect information on material and
supplies that support a measure installation. Store surveys may yield information on costs, equipment types,
size ranges available (e.g., wattages, input ratings), efficiency ranges available, and non-energy-related
feature variations. In-store retail surveys should identify the specific region, boundary, or area served by a
given store so that cost-influencing factors dependent on location can be identified and isolated. Costinfluencing factors can include variations in taxes between states or localities, for example. Stores included in
surveys should come from both urban and rural settings in order to fully characterize the market. Surveys
should also target a wide range of store types including grocery, big-box hardware, and drugstores.
Upon identifying possible retailers, a sampling plan should be specified, and any weighting methods should
be identified and described.
10.3 Contractor and Project Invoices
Applicable measure economic elements:
» Material, basic
» Material, complex
» Ancillary material, basic
» Ancillary material, complex
» Disposal
» Labor hours, basic
» Design and engineering
» Permitting and licensing
» Delivery
» Ongoing maintenance – labor, basic
» Ongoing maintenance – material, basic
» Ongoing maintenance – material, complex
» Ongoing maintenance – disposal
» Consumable materials, basic
» Consumable materials, complex
» Consumable disposal
Information on contractor-installed measures can come from invoices and pricing sheets. Contractor invoices
are a documented source of actual measure costs to end users. Invoices often include useful information on
the equipment installed such as model number and manufacturer that facilitate market characterization in
addition to incremental cost development.
Customer invoices may be itemized to capture all aspects of an installation including material components,
project design costs, material used to support an installation, and labor, for example. Invoices may also be
23
available for maintenance service and upkeep of installed measures. This can include maintenance materials,
labor, and consumables required for operation.
Some contractors may not differentiate some components such as material and labor costs, or identify the
cost of specific ancillary components. Invoices for both baseline and efficiency equipment should be
collected. Invoices provide clear information on the type of equipment installed (e.g., size, manufacturer, and
model number), and contact information to facilitate interviews if needed.
Price sheets from contractors may also be used as these provide data in a transparent and standardized
format for comparison. Price sheets may not represent the actual costs paid by customers; verification may
be required. However, price sheets are useful for incremental costs (baseline to measure equipment
comparisons) and for determining the variety of manufacturers offered.
10.4 Online Retail
Applicable measure economic elements:
» Material, basic
» Ancillary material, basic
» Ongoing maintenance – material, basic
» Consumable materials, basic
An online survey of costs for both material and supporting material (i.e., ancillary, maintenance, and
operations-related materials) is often the least-cost method of collecting data and can offer easy access to a
comprehensive list of vendors, manufacturers, brands, efficiency levels, and sizes for a given measure type.
Internet data is extensive, transparent, and accessible and can be used to identify the full range of equipment
available to the market, along with equipment specifications. Internet cost data is inexpensive to obtain and
can be readily updated. Internet costs may not reflect the full cost for measures with contractor markups
applied.
Additionally, Internet data typically is not region-specific and does not include any information on
installations. Finally, Internet costs may not reflect actual costs for measures where the majority of purchases
are made through channels other than the Internet.
The following presents a summary of potential strengths and weaknesses of online retail data:
Online data strengths:
» Sufficient data for developing incremental costs of measure and base pairs
» Can provide large data volumes to facilitate regressions analysis
» Easy to identify and establish sources
» Inexpensive data collection, including the potential to automate data collection through data
“scraping” programs
» Data available over time to support price trending
Online data weaknesses:
» Typically does not capture local or regional prices
»
»
Limited to simple and common measure types
No information on installation practices
24
10.5 Built-up Cost Analysis
Applicable measure economic elements: Material, basic.
In some cases, it may not be possible to isolate the incremental material cost of a measure by directly
comparing the costs of efficient and baseline technologies (i.e., if the same non-energy features are not
offered for standard and high-efficiency equipment7). In these cases, a built-up cost approach may be used to
estimate the incremental cost between a baseline technology and the efficient case specifications. This
method would separate out any variations in price that are present as a result of the differences in nonenergy factors and make the true incremental cost accessible for measure analysis.
An example of this method would be to estimate the incremental cost of high-efficiency, hard-wired lighting
fixtures for which identical-looking standard efficiency fixtures are not available. In this case, the
incremental cost of the high-efficiency lighting element over the standard efficiency lighting element could
be used, as incremental cost of wiring and non-lighting features can be assumed to be negligible.
10.6 Contractor Interview
Applicable measure economic elements:
» Material, complex
» Ancillary material, complex
» Disposal
» Labor hours, complex
» Design and engineering
» Permitting and licensing
» Ongoing maintenance – labor, complex
» Ongoing maintenance – material, complex
» Ongoing maintenance – disposal
» Consumable materials, complex
» Consumable disposal
Cost information from contractors can be gathered through telephone interviews. Costs are generally actual
retail costs paid by customers. Contractors can also be interviewed to obtain information on other aspects of
installation such as ancillary material, design and engineering costs, labor rates, and labor hours for specific
installations.
Contractors will have specialized knowledge and experience with measures and can provide specific
information on installation times, required professionals (both number of persons and required trades),
equipment markup percentages, and high-volume discount percentages. Additionally, contractors can
provide details on the changes required to move from standard to efficient equipment, the types of existing
conditions found at installation sites (and how this can impact installations and material selections), and
details on the most prevalent materials and equipment installed in a particular region.
7
For example, lighting fixtures.
25
Contractors are also a useful source for calibrating data. Interviews can be structured in a way so that draft
analyses (or portions of analyses) can be presented to contractors to gauge how closely the analyses results
match their own work practices.
Finally, contractor interviews may yield useful information on maintenance and operations requirements.
Contractors typically have first-hand knowledge of the requirements for operating and maintaining the
equipment that they install.
The following presents a summary of potential strengths and weaknesses of contractor interview data:
Contractor data strengths:
» Local/regional retail prices paid by customers for both measure and base equipment
» Interviews can be structured to gain additional information (e.g., market-weighting data)
» Established relationships with contractors will facilitate future data collection efforts to support price
trend studies
» Best source of labor rates and labor hours data
» Single source for both measure and base equipment technical specifications
» Facilitates match-pairs analysis
» Best source for major residential equipment and complex systems
Contractor data weaknesses:
» Difficult to establish/initiate sources
» Cost to obtain data (time and staff for interviews)
10.7 Distributor Interview
Applicable measure economic elements: Material, complex.
While distributors (and manufacturers) may not provide pricing seen by purchasing end users, they are
useful in providing wholesale costs for large regions. Although specific costs paid by customers are not
provided, robust costs not subjected to varying contractor markups can be obtained. Markups from the
distributor to the contractor and ultimately to the customer are required supplements to information
gathered through distributor interviews. Material costs are generally the only type of information provided
and distributors are not involved with installations. Analysts should note that distributors may not provide
information readily as this can be sensitive and competitive information.
The following presents a summary of potential strengths and weaknesses of distributor interview data:
Distributor data strengths:
» Wholesale prices for both measure and base equipment
» Interviews can be structured to gain additional information (e.g., market-weighting data)
Distributor data weaknesses:
» Difficult to establish/initiate sources
» Distributors may be the most reluctant to hand over information
» Wholesale costs will require a markup
» Cost to obtain data (time and staff for interviews)
26
10.8 Program Tracking Data
Applicable measure economic elements:
» Material, complex
» Delivery
For measures related to existing programs, program tracking data can be useful and coupled with other data
sources to offer information on the market that is specific to a particular program and measure. Utility
program tracking data may include customer invoices that can provide information specific to installations
in addition to purchases. Program tracking data may list material model numbers, manufacturers, and
brands, for example. Program tracking data may also list installing contractor contact information for further
research using interviews. Note that baseline data may not be available for current practice measures,
however.
If program tracking data is used, the program delivery mechanism should be identified before analysis is
conducted. The program delivery mechanism dictates how information is collected within the tracking data.
For example, tracking data for an upstream prescriptive rebate would include wholesale data while a direct
install program would most likely source information from a contractor prior to their markup to the
customer being applied.
10.9 Additional Professional and Industrial Market Actor and Program Administrator
Interviews
Applicable measure economic elements:
» Material, complex
» Ancillary material, complex
» Disposal
» Labor hours, complex
» Ongoing maintenance – labor, complex
» Ongoing maintenance – material, complex
» Ongoing maintenance – disposal
» Consumable materials, complex
» Consumable disposal
Other industry professionals familiar with specific equipment, the process to install it, and the maintenance
and operations requirements may provide useful information on material costs such as equipment costs,
installation practices, and the current conditions of the market or of a particular program (for the case where
program administrators are interviewed). While these individuals typically do not have details on specific
material specifications or costs, the information they provide may be used to establish benchmarks in costs
or to calibrate analysis activities.
10.10 RS Means or Other Secondary Sources
Applicable measure economic elements:
» Labor hours, basic
» Ongoing maintenance – labor, basic
27
RS Means (http://rsmeans.reedconstructiondata.com/) or other similar secondary sources may be used to
estimate hours for basic installations and maintenance. RS Means offers both national and regionally specific
estimates of labor installation and maintenance hours for a comprehensive list of equipment.
10.11 Analyst Estimates
Applicable measure economic elements:
» Labor hours, basic
» Delivery
» Ongoing maintenance – labor, basic
For basic measures, analysts may provide their own estimates for certain installation hours, delivery costs,
and maintenance labor requirements. Transparent and thorough analyses should supplement these
assumptions and should typically be used where costs are small or only represent a small portion of the
overall measure cost.
10.12 Maintenance Staff Interviews
Applicable measure economic elements:
» Ongoing maintenance – labor, basic
» Ongoing maintenance – labor, complex
» Ongoing maintenance – material, basic
» Ongoing maintenance – material, complex
» Ongoing maintenance – disposal
» Consumable materials, basic
» Consumable materials, complex
» Consumable disposal
Similar to contractor interviews, maintenance staff can be interviewed either on-site or over the phone in
order to gather information on the maintenance and operation of installed measures. Maintenance staff may
either be in-house staff or hired service contractors who maintain equipment and perform regularly
scheduled upkeep. Information from maintenance staff interviews may include maintenance labor and
material needs, operation material needs, and disposal requirements.
Maintenance staff will have specialized knowledge and experience with measures and can provide specific
information on the upkeep requirements encountered. Additionally, maintenance staff can provide details
on the changes in maintenance and operations that occur when moving from standard to efficient
equipment, and information on the typical conditions of measure installations (both new and existing) and
site conditions for a particular region.
10.13 Justification for Source Selection
Multiple data sources may exist for each element. The analyst should identify:
» Available data sources
» The characteristics of each data set and their differences (e.g., region surveyed, sample size, and
vintage)
» The limitations and uncertainties associated with the data
28
Sources from the prioritized lists should be examined to determine their appropriateness for a given
analysis. If a source is not to be used (i.e., a higher priority source is skipped for a lower priority source) the
reason behind the decision should be stated in the Measure Costs and Benefits Checklist. The following are
characteristics to consider when selecting a data source:
» Accessibility to information
» Resources required (cost and time) to obtain and maintain information
» Ability to facilitate updates (and updates for specific capital cost components)
» Ability to support cost trending over multiple program years
» Scope of market covered by source (e.g., range of products, manufacturers, and regions)
» Ability to isolate specifics and create subset data (e.g., specific markets, manufacturers)
» Sufficient data to develop estimate ranges across various spectrums (e.g., material costs across range
of available efficiency levels)
» Information on both baseline and measure equipment
» Information on complex and custom systems as well as the components that make up those systems
Secondary data sources8 may be used. Where secondary data is used, efforts should be made to adjust for
any differences between the measure specifications from the secondary analysis and the measure in
question, including differences in time, location, or demographics. Analysts must provide the same
summary information and source justification for secondary data sources as for primary data sources.
When using secondary sources, several factors should be considered:
» Vintage – Information may be dated. When possible, sources should be validated to determine if
they are still useful and relevant. Older cost sources can be updated using indexes such as Producer
Price Indexes (PPIs) discount rates, through a ratio of past and current costs for similar products.
» Geographical attribution – Secondary sources are often tied to a particular region, state, or utility
territory. Data from other regions should be adjusted to account for differences in cost of living,
local regulatory burdens that may increase costs, and other factors. Secondary sources such as RS
Means should be used to adjust data from outside the region to be representative of the Northwest.
» Reliability – Secondary sources should come from known and reliable sources and the nature of a
source’s development should be understood.
» Granularity and transparency – Secondary sources should clearly define and identify the methods
and components used to develop full capital costs. Similar to the effort needed to gather primary
data, secondary sources should show the source of their information and how the data analyses
were applied. For example, secondary sources that provide spreadsheet tools in addition to
documentation typically provide high levels of granularity and transparency.
When reliable data sources are unavailable for a measure economic element that is expected to be significant,
the analyst may use their professional judgment or defer to the RTF to provide this estimate.
8
Secondary data refers to data previously collected for other purposes.
29
Appendix II: Measure Economic Element Reference Sheet
Category
Sub-Category
Element
Element types
Basic
Material
Complex
Capital cost
Capital cost
Basic
Ancillary material (wiring,
condensate flue, etc.)
Complex
Disposal
RTF-supplied
standardized
values
Prioritized sources
»
»
»
»
»
»
»
»
»
»
»
Regional sales (price and volume)
In-store retail
Contractor invoices
Online retail
Built up cost analysis
Secondary sources
Contractor interviews
Distributor interviews
Contractor and project invoices
Program tracking data
Additional professional and industrial market actors and
program administrators
»
»
»
»
»
»
Contractor invoices
»
»
Contractor invoices
On-site installer interview or documentation review
Retail (in-store and online)
Contractor interviews
Contractor invoices
Interviews with additional professional and industrial
market actors and program administrators
Contractor interviews
30
Category
Sub-Category
Element
Labor
Element types
RTF-supplied
standardized
values
Basic hours
Labor rates
Complex hours
Labor rates
Design and engineering
Permitting/licensing
Markups
RTF Mark-ups
Delivery (e.g. shipping costs)
Ongoing maintenance, labor
Basic hours
Labor rates
Complex hours
Labor rates
Basic
Maintenance
Maintenance
Ongoing maintenance,
materials
Complex
Ongoing maintenance,
disposal
Operations
Fuel
Electricity
From ProCost
Prioritized sources
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
RTF Supplied
»
»
»
Contractor invoices
RTF Supplied
Contractor interviews
Contractor invoices
Contractor interviews
Contractor invoices
RTF Supplied
Program tracking database
Invoices
Analyst estimates
RTF Supplied
RTF Supplied
Contractor invoices
On-site installer interview or documentation review
Retail (in-store and online)
Contractor interviews
Contractor invoices
Interviews with additional professional and industrial
market actors and program administrators
Contractor interviews
RTF Supplied
31
Category
Sub-Category
Element
Element types
Natural gas
Propane
RTF-supplied
standardized
values
From ProCost
Residential
Cost per gallon
Commercial /Industrial
Heating oil
Service rates
Wood
Cost per cord
Other fuel
Water
Cost per gallon
Basic
Consumable materials
Non-energy
consumables
Complex
Basic
Chemicals - disposal
Complex
Ancillary Impacts
Building value
Rent premiums
Equipment downtimes
Renewable energy credits
Prioritized sources
»
»
»
»
»
»
»
»
»
»
»
»
»
RTF Supplied
»
»
»
»
»
»
»
»
Contractor invoices
RTF Supplied
RTF Supplied
RTF Supplied
RTF Supplied
Not specified
RTF Supplied
Contractor invoices
On-site installer interview or documentation review
Retail (in-store and online)
Contractor interviews
Contractor invoices
Interviews with additional professional and industrial
market actors and program administrators
Contractor interviews
Contractor invoices
Contractor interviews
Not specified
Not specified
Not specified
Not specified
32
Category
Sub-Category
Element
Element types
RTF-supplied
standardized
values
Prioritized sources
Resale of on-site generation
»
Not specified
Marketing and public
relations
»
Not specified
Not specified
Absenteeism
»
»
Attracting and retaining top
tenants and employees
»
Not specified
»
»
Not specified
»
Not specified
»
Not specified
»
Not specified
»
Not specified
»
Not specified
»
Not specified
Productivity
Occupant comfort
Occupant illness
Indoor environmental
quality
Utility - Reduced customer
calls, shutoffs, and
reconnections for
delinquency
Utility - Reduced cost
collection activity
Reduced arrearages / reduce
carrying costs on arrearages
Income generated from
measure installation
Avoided costs for
unemployment benefits
Not specified
Not specified
33
Category
Sub-Category
Element
Reduced heat island effect
(e.g., cool roof)
Element types
RTF-supplied
standardized
values
Prioritized sources
»
Not specified
34