# Definitions

- **operation:** document
- **citation:** 4 CCR 723-4 Rule 4751
- **title:** Definitions
- **source type:** regulation
- **agency:** Colorado Public Utilities Commission
- **status:** current
- **official:** true
- **published on:** Not available
- **effective on:** Not available
- **summary:** The following definitions apply to rules 4750 through 4761, unless § 40-1-102, C.R.S., provides otherwise. (a) "Amortization" means the systematic spreading of expenditures or capital costs incurred for DSM programs, through regular accounting entries over a specified period of time. (b) "Benefit/co
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- **source url:** https://www.sos.state.co.us/CCR/DisplayRule.do?action=ruleinfo&ruleId=2260&deptID=18&agencyID=96&deptName=Department%20of%20Regulatory%20Agencies&agencyName=Public%20Utilities%20Commission&seriesNum=4%20CCR%20723-4
**body:**

The following definitions apply to rules 4750 through 4761, unless § 40-1-102, C.R.S.,
provides otherwise.
(a) “Amortization” means the systematic spreading of expenditures or capital costs
incurred for DSM programs, through regular accounting entries over a specified
period of time.
(b) “Benefit/cost ratio” means the ratio of the net present value of benefits to the net
present value of costs, as calculated using the modified TRC test.

(c) “Cost effective” means a benefit/cost ratio of greater than one.
(d) “Demand side management” (DSM) means the implementation of programs or
measures which serve to shift or reduce the consumption of, or demand for, gas.
(e) “Discount rate” means the interest rate used in determining the present value of
future cash flows of DSM costs and benefits, for both forecasted and actual cash
flows. The forecasted DSM costs and benefits are used to estimate the cost
effectiveness of DSM measures to develop a cost effective DSM portfolio. The
actual DSM costs and benefits, which are the actual costs of the program and the
documented energy savings, are used to determine net economic benefits for the
purpose of calculating the bonus. Discount rate shall be the utility’s after-tax
weighted average cost of capital (WACC).
(f) “DSM education” means a program, including but not limited to an energy audit,
that contributes indirectly to a cost-effective DSM program by promoting
customer awareness and participation.
(g) “DSM measure” means an individual component or technology, such as attic
insulation or replacement of equipment.
(h) “DSM period” means the effective period of an approved DSM plan.
(i) “DSM plan” means the DSM programs, goals, and budgets over a specified DSM
period, generally considered in one year increments, as may be proposed by the
utility.
(j) “DSM program” means any of the following programs or combination of
programs: energy efficiency, including weatherization and insulation;
conservation; load management; beneficial electrification, as defined in § 40-1-
102(1.2), C.R.S.; demand response; DSM education targeted at market
transformation; and services offered to customers to reduce gas usage.
(k) “Energy efficiency program” see DSM program.
(l) “Gas Demand-Side Management Cost Adjustment” (G-DSMCA) means a rate
adjustment mechanism designed to compensate a utility for its DSM program
costs.
(m) “Gas Demand-Side Management bonus” (G-DSM bonus) means a bonus
awarded to a utility in accordance with § 40-3.2-103(2)(d), C.R.S.

(n) “Market transformation” means a strategy for influencing the adoption by
consumers of new techniques or technologies. The objective is to overcome
barriers within a market through coordinating tactics such as education, training,
product demonstration and marketing, often conducted in concert with rebates or
other financial incentives.
(o) “Modified Total Resource Cost test” or “modified TRC test” means an economic
cost-effectiveness test used to compare the net present value of the benefits of a
DSM program or measure over its useful life, to the net present value of costs of
a DSM measure or program for the participant and the utility, consistent with §
40-1-102(5), C.R.S.
(p) “Net economic benefits” means the net present value of all benefits in the
modified TRC test, as applied to the utility’s portfolio of DSM programs, less the
net present value of the costs in the modified TRC test associated with that same
portfolio.
(q) “Savings goal(s)” refers to the energy and demand savings levels approved in a
strategic issues proceeding.
(r) “Savings target(s)” refers to the energy and demand savings levels approved in a
DSM plan proceeding and are designed to meet or exceed the savings goals set
by the Commission in a strategic issues proceeding.
(s) “Strategic issues proceeding” means a proceeding in which the Commission
examines, addresses, and establishes high-level DSM policy findings for a utility.
In a strategic issues proceeding, the utility’s application shall include proposed
savings goals, peak demand reduction resulting from energy efficiency and
demand response and commensurate budgets. The outcome of a strategic
issues proceeding results in a DSM policy framework from which the utility then
develops and files its DSM plan for Commission approval.
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