RTF Cost/NEB Subcommittee –
As homework for next week’s subcommittee call (Wednesday, September 7, from 2 p.m. to 4 p.m.), we
would like you to review three documents:
1) this document (“Overview v01”)
2) the supporting Excel file (“Measure Economics v03”)
3) a proposed guidelines outline (“Measure Economics Guidelines - v02”)
This document proposes a systematic approach identifying, categorizing, and judging for inclusion the
individual elements of measure economics (i.e. all of the quantifiable costs and benefits of a measure).
It also includes a list of questions to discuss on the call.
The supporting Excel file provides a draft list of measure economic elements, and a tentative grouping
of elements into categories.
The proposed guidelines outline is self-explanatory.
For our call, we propose the following agenda:
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Role call [2:00 – 2:05]
Navigant summary of Overview document [2:05 – 2:20]
Discussion of Measure Economics Guidelines Process [2:20 – 2:40]
Navigant review of Measure Economic Elements [2:40 – 2:45]
Discussion of Measure Economic Elements [2:45 – 3:00]
Discussion of additional questions (last section of this document) [3:00– 3:20]
Review of Guidelines Outline [3:20 – 3:35]
Discussion of next steps [3:40 – 4:00]
We welcome your feedback in advance of our subcommittee meeting.
-Ryan, Nick, and Matt
Process for Developing Measure Economics Guidelines
We would like to propose a process for developing these guidelines. As discussed on our kick-off
meeting call, we think that the term “Non-energy Benefits” is misleading for several reasons:
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Fuels that are not electricity or natural gas (e.g. propane, heating oil, wood) might be included
Some values may be negative (e.g. an efficient measure that requires more maintenance than
the baseline).
The distinction between O&M and NEB is not clear
With this in mind, we would to use the term “measure economics” in our discussions, which would
include all quantified economic elements considered, including those traditionally thought of as
measure costs, fuels, O&M, NEBs, etc.
Then, we propose the following approach to this project:
1) Identify all elements of measure economics from the societal perspective (TRC)
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For example, measure material cost, measure installation labor cost, water usage
limit this to measure end use (i.e. do not address economics of electricity production, but do
consider on-site emissions)
these are both costs and benefits (an EE measure may have non-energy costs associated with it)
we have provided draft a list of elements for your review and comment
2) Categorize elements and develop appropriate names for categories
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For example, upfront measure cost, fuels, building owner impacts
we have tentatively grouped the list of elements and suggested category names
3) In parallel, develop an RTF mechanism for determining the precedence on treatment of individual
elements
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For example, to included residential labor or not
The RTF should have explicit criteria for inclusion/exclusion of elements. For example, elements
for which the value can be accurately quantified, as determined by RTF vote.
At the highest level, this is a decision to include an individual element in measure economics.
Options include:
o Do not include this element in measure economics (provide justification)
o Include this element in measure economics (provide justification)
o Determine inclusion of this element in measure economics on a measure-by-measure
basis (provide justification)
For purposes of guideline development, we recommend that the RTF subcommittee vote on the
inclusion of each element. We recommend that any element that there is significant subcommittee
disagreement about be addressed by the RTF during RTF monthly meetings.
For any element that is included (or sometimes included) in measure economics, the RTF should further
decide what information should be standardized across all measures and what information should be
determined per measure (e.g. use a single set of water values for all analyses).
Information that may be standardized across measures includes:
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per unit costs (e.g. water, labor),
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secondary data sources (e.g. DEER),
approaches (e.g. standardized approach to valuing site-specific productivity gains).
We further recommend that standardized information be maintained by the RTF in an Excel workbook
(or series of workbooks), and that this be referenced, element by element, for all measure analyses.
Beyond the timeframe of the guidelines development project, we recommend that the RTF (or this
subcommittee) review proposals for measure economic element inclusion/exclusion independent of
measure proposal reviews. This will promote standardized and consistent treatment of measure
economics elements across measures.
Additional Discussion Topics for the Subcommittee Call
There are a few other key topics to discuss that we’d like feedback from you on:
1) Rigor: Should all measure economics elements be considered together, or are some more
important than others? For example, should more attention be paid to capital costs than O&M?
a. Recommendation: An analysis should include rough estimates of all relative elements,
and then more rigor should be applied to the most significant elements. In many cases,
the most significant elements will be those related to capital costs (materials and/or
installation labor). In other cases, the most significant element might be maintenance
labor (e.g. avoided lamp replacement costs for LED or induction lamps) or water (e.g.
faucet aerator).
2) Data source priority list: Should the guidelines include priority lists of approaches to data
collection (especially for measure costs)? For example, for widgets, the priority list might be:
recent sales data (including volume) >> program data >> in-store price collection >> online price
collection >> secondary cost research
3) Rigor: For each data collection/analysis approach, what should be said about rigor? Should a
level(s) of rigor be specified? Should analysts be required to provide a cost range, rather than a
single point estimate? This range might be used to consider measures with B/C ratios close to
1.0.
4) Measure Economics element inclusion/exclusion – What voting approval percentage should be
required to deem an element “RTF subcommittee recommended for inclusion (or for
exclusion)”? E.g. 75% of voting subcommittee members must approve?
5) RTF Meetings - Can we bring our measure economics framework to the RTF in October and have
the RTF discuss/vote on the inclusion/exclusion of controversial measure economics elements?
6) Deference to Energy Analysis – Is it reasonable to defer to the energy analysis for definitions of
baseline and measure cases? If this is reasonable, than the measure economics guidelines can
say something like “baseline and measure case definitions should be consistent with those used
for the energy analysis”, rather than spelling out what the definitions should be.
7) Measure Economics element aggregation – Where possible, would it suffice to collect data on
an aggregation of individual measure elements (e.g. “total installed cost”), rather than detailing
each individual element (e.g. materials, labor)?
8) Embedded Energy – What should the measure economics guidelines say about embedded
energy in non-energy impacts (e.g. water delivery and waste water treatment)?
9) Non UES Measures - What guidelines should be provided for measure economics of standard
protocol and custom protocol measures? In some cases, cost may be relatively installationindependent, in other cases, costs may vary greatly by installation.