# Gas DSM Bonus (G-DSM Bonus)

- **operation:** document
- **citation:** 4 CCR 723-4 Rule 4760
- **title:** Gas DSM Bonus (G-DSM Bonus)
- **source type:** regulation
- **agency:** Colorado Public Utilities Commission
- **status:** current
- **official:** true
- **published on:** Not available
- **effective on:** Not available
- **summary:** (a) The Commission shall determine a financial bonus structure for gas DSM. The bonus amount shall be a percentage net economic benefits resulting from a DSM plan over the period under review, with the specific structure and calculation mechanism of the bonus determined by the Commission in the util
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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:**

(a) The Commission shall determine a financial bonus structure for gas DSM. The
bonus amount shall be a percentage net economic benefits resulting from a DSM
plan over the period under review, with the specific structure and calculation
mechanism of the bonus determined by the Commission in the utility’s strategic
issues proceeding.
(b) The Commission shall review each G-DSM bonus calculation and shall
determine the level of bonus, if any, for which the utility is eligible consistent with
the bonus framework established in the utility’s most recent strategic issues
proceeding. The collection on any G-DSM bonus awarded will be apportioned
between residential and nonresidential customers based on the proportion of
residential and nonresidential net economic benefits used to calculate the G-
DSM bonus.
(c) The G-DSM bonus, as modified and approved by the Commission, shall not
count against a gas utility’s authorized rate of return or be considered as net
operating earnings in rate proceedings.
(d) In the G-DSM bonus filing, the utility shall submit to the Commission the
following, at a minimum:
(I) documented expenditures on DSM programs for the current G-DSMCA
period;
(II) energy savings and peak demand reductions for the calendar year for
which the bonus is to be awarded estimated following and the techniques
approved in the DSM plan. The utility shall explain whether the actual gas
savings are validated through the measurement and verification process
as approved in the utility’s DSM plan;

(III) estimated cost-effectiveness of program expenditures for the current G-
DSMCA period in terms of the amount of gas saved per unit of program
expenditures;
(IV) actual gas savings and the techniques used to calculate these gas
savings for the prior G-DSMCA period. The utility shall explain whether the
actual gas savings are validated through the measurement and verification
process, pursuant to rule 4755;
(V) actual cost-effectiveness of program expenditures for the prior G-DSMCA
period in terms of the amount of gas saved per unit of program
expenditures. The utility shall explain whether the actual cost
effectiveness of program expenditures is validated through the
measurement and verification process, pursuant to rule 4755;
(VI) proposed tariffs containing rates to collect the bonus over 12 months; and
(VII) any additional information required by the Commission in the utility’s most
recent strategic issues proceeding.
(e) For the purposes of calculating the bonus, the costs and benefits associated with
an income-qualified DSM program may be excluded from the calculation of the
net economic benefits for the entire DSM portfolio if the modified TRC value for
the income-qualified program is below 1.0. If the modified TRC value for the
income-qualified program is above 1.0, the Commission may exclude the net
economic benefits attributable to income-qualified programs from the bonus if the
utility has met its targets for income-qualified programs.
(f) For the purpose of calculating the bonus, the modified TRC shall be calculated in
accordance with paragraph 4753(o), unless otherwise specified in paragraph
4760(e).
(g) The maximum bonus is 20 percent of net economic benefits or 25 percent of
expenditures, whichever is less, or any other incentive cap set by the
Commission in the utility’s strategic issues proceeding.
(h) Any awarded bonus shall be authorized as a supplement to a utility and not count
against its authorized rate of return or be considered in rate proceedings. The
awarded bonus shall be recovered through the G-DSMCA over a 12-month
period after approval of the bonus.
(i) Any combined electric and gas utility seeking a G-DSM bonus for new residential
or commercial construction shall provide a narrative discussion that explains why
that gas DSM program does not incent additional gas usage as compared to a
beneficial electrification alternative.
(j) Accounting for G-DSM bonus shall follow what has been prescribed for G-
DSMCA costs, specifically in regard to interest on over- and under- recovery. A

separate sub-account in Account No. 186 shall be created for any deferred G-
DSM bonus amount.
(k) If the Commission finds that the actual performance varies from performance
values used to calculate the G-DSM bonus in rule 4754, then an adjustment shall
be made to the amount of G-DSM bonus award. Any true-up in G-DSM bonus
will be implemented on a prospective basis.
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