DSM Plan

Each utility shall file, in accordance with paragraph 4752(e), a prospective gas DSM plan that covers a DSM period of two years, unless otherwise ordered by the Commission. The plan shall demonstrate how the utility will meet or exceed the energy savings goals established by the Commission pursuant to these rules through the implementation of DSM programs and should also be consistent with the utility's most recent clean heat plan approved by the Commission pursuant to rule 4732. The plan shall include the following information:#

(a)the utility's proposed expenditures by year for each DSM program, by budget category, in accordance with the Commission's order addressing the utility's most recent strategic issues proceeding application;#

(b)the utility's estimated gas energy savings and avoided greenhouse gas emissions over the lifetimes of the measures implemented in a given annual DSM program period, expressed in dekatherms per dollar of expenditure, and presented for each DSM program proposed for Commission approval; this represents the utility's proposed savings target required by § 40-3.2-103(2)(b), C.R.S.;#

(c)the anticipated units of energy to be saved annually by a given annual DSM program, which equals the product of the proposed expenditure target and proposed savings target; this product is referred to herein as the energy target;#

(d)anticipated design peak demand savings, as applicable to individual DSM programs and to the portfolio as a whole;#

(e)the estimated dollar per therm value that represents the utility's annual fixed costs that are recovered through commodity sales on a per therm basis;#

(f)the utility shall include in its DSM plan application data and information sufficient to describe the design, implementation, oversight and cost effectiveness of the DSM programs. Such data and information shall include, at a minimum, program budgets delineated by year, estimated participation rates and program savings (in therms), and the greenhouse gas emissions avoided from each program;#

(g)the utility's plans to comply with the labor standards in § 40-3.2-105.5, C.R.S.; and#

(h)in the information and data provided in a proposed DSM plan, the utility shall reflect consideration of the factors set forth in the Overview and Purpose, rule 4750. At a minimum the utility shall provide the following information detailing how it developed its proposed DSM program:#

(I)descriptions of identifiable market segments, with respect to gas usage and unique characteristics;#

(II)a comprehensive list of DSM measures that the utility is proposing for inclusion in its DSM plan;#

(III)a detailed analysis of proposed DSM programs for a utility's service territory in terms of markets, customer classes, anticipated participation rates (as a number and a percent of the market), estimated energy savings and cost effectiveness;#

(IV)a ranking of proposed DSM programs, from greatest value and potential to least, based upon the data required in subparagraph (f)(III);#

(V)proposed marketing strategies to promote participation based on industry best practices;#

(VI)calculation of cost effectiveness of the proposed DSM programs using a modified TRC test. Each proposed DSM program is to have a projected value greater than or equal to 1.0 using a modified TRC test, except as provided for in paragraph 4753(g);#

(VII)an analysis of the impact of the proposed DSM program expenditures on utility rates, assuming a 12-month cost recovery period;#

(VIII)the best available values for gas leakage during the extraction, processing, transportation, and delivery of gas by the utility, categorized by each stage, as well as leakage from piping or other equipment on customer premises, and any relevant data and emissions accounting methodologies developed by the Air Pollution Control Division regarding methane leakage rates and the appropriate global warming potential of methane, for the purpose of calculating the cost of methane emissions; and#

(IX)a narrative discussion showing that the DSM measures and programs, particularly in new construction, do not discourage otherwise economic beneficial electrification.#

(i)In its DSM plan, the utility shall address how it proposes to prioritize DSM services and programs for income-qualified customers and customers in disproportionately impacted communities.#

(I)The utility may propose one or more DSM programs for income-qualified customers or customers in disproportionately impacted communities that yield a modified TRC test value below 1.0.#

(II)For a utility with 50,000 or more full-service customers, no less than 25 percent of annual residential DSM expenditures shall be targeted on one or more DSM programs or measures for income-qualified residential customers.#

(III)For a utility with fewer than 50,000 full-service customers, no less than 15 percent of annual residential DSM expenditures shall be targeted on one or more DSM programs or measures for income-qualified residential customers.#

(IV)On or after January 1, 2026, the Commission may commence proceedings to adjust the percentages set forth in subparagraphs 4753(i)(II) and (III) so long as the resulting percentages represent a significant portion of DSM program expenditures and continue to make progress toward achievement of the State of Colorado's energy efficiency and greenhouse gas emission reduction goals.#

(j)In proposing an expenditure target for Commission approval, the utility shall comply with the following:#

(I)the utility's annual expenditure target for DSM programs shall be consistent with the estimated budget for DSM program expenditures established by the Commission in the utility's most recent strategic issues proceeding; and#

(II)funds spent for education programs, market transformation programs and impact and process evaluations and program planning related to gas DSM programs may be recovered without having to show that such expenditures, on an independent basis, are cost-effective; such costs shall be included in the overall benefit/cost ratio analysis.#

(k)The utility shall propose a budget to achieve the expenditure target proposed in paragraph 4753 (a). The budget shall be detailed for the overall DSM plan and for each program for each year and shall be categorized into:#

(I)planning and design costs;#

(II)administrative and DSM program delivery costs, including labor costs reflecting compliance with all applicable labor standards set forth in § 40- 3.2-105.5, C.R.S.;#

(III)advertising and promotional costs, including DSM education;#

(IV)customer incentive costs;#

(V)equipment and installation costs;#

(VI)measurement and verification (M & V) costs; and#

(VII)miscellaneous costs.#

(l)The budget shall explain anticipated increases/decreases in financial resources and human resources from year to year.#

(m)A utility may spend more than the annual expenditure target established by the Commission up to 25 percent over the target, without being required to submit a proposed DSM plan amendment. A utility may submit a proposed DSM plan amendment for approval when expenditures are in excess of 25 percent over the expenditure target.#

(n)As a part of its DSM plan, each utility shall propose a DSM plan with a benefit/cost value of unity (1.0) or greater, using a modified TRC test.#

(o)For the purposes of calculating and reviewing a modified TRC, the following components shall be included. Forecasted DSM costs and benefits are used to estimate the cost-effectiveness of DSM measures to develop a cost-effective DSM portfolio.#

(I)Benefits shall include, but are not limited to, as applicable: the utility's avoided transmission and distribution capital cost savings associated with reductions or limited growth in design peak demand; energy costs; the participant's avoided operating and maintenance costs; the valuation of avoided greenhouse gas emissions; and non-energy benefits, as set forth in this rule 4753. The valuation of avoided greenhouse gas emissions shall include the social cost of carbon dioxide and the social cost of methane, consistent with rule 4528.#

(II)Costs shall include utility and participant costs. The utility costs shall include the net present value of costs incurred in accordance with the budget set forth in rule 4753. For comparative purposes, in addition to this base case calculation of cost-effectiveness, the utility may also provide a case that does not include the social costs of carbon dioxide and methane. Forecasted DSM costs and benefits are used to estimate the cost effectiveness of DSM measures to develop a cost-effective DSM portfolio.#

(III)The initial TRC ratio, which excludes consideration of societal benefits, shall be multiplied by a factor established by the Commission in the utility's strategic issues proceeding to reflect the value of the societal and non-energy benefits. The result shall be the modified TRC. A utility may propose for approval a different factor for societal impacts, but must submit documentation substantiating the proposed value.#

(IV)A determination of cost-effectiveness using the modified TRC test by the Commission will ultimately be measured at the DSM portfolio level.#

(V)For purposes of evaluating a gas DSM program or measure that incorporates innovative technologies with the potential for significant impact, such as energy-saving technologies that go beyond what is achievable using energy efficiency measures alone, the Commission may find the program or measure cost-effective, even if its initial benefit-cost ratio is not greater than 1.0 when calculated using currently available data and assumptions.#

(p)Measurement and verification (M & V) plan. The utility shall describe in complete detail how it proposes to monitor and evaluate the implementation of its proposed programs. The utility shall explain how it will accumulate and validate the information needed to measure the plan's performance against the standards, pursuant to rule 4755. The utility shall propose measurement and verification reporting sufficient to communicate results to the Commission in a detailed, accurate and timely basis.#

(q)If a utility files an application to open a DSM strategic issues proceeding pursuant to rule 4761, its subsequent DSM plan application shall include programs and measures to, at a minimum, meet the energy savings targets and policy goals established by the Commission in the strategic issues proceeding.#

(r)As a part of its DSM plan, each utility shall describe its consideration of incentives for customers to utilize behind-the-meter thermal renewable resources as defined in § 40-1-102(1.1), C.R.S. If the utility proposes to include such incentives in its DSM plan, the cost of such incentives shall be reflected in the budget proposed under subparagraph (j)(IV) above.#