FEI-FEVI 2010 EEC Report filed March 31, 2011 - FortisBC

Commission Determination
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The Commission Panel notes the position of Terasen, and the acknowledgements of BCOAPO and
BCSEA‐SCBC that, in the case of the Application, the free rider issue has no immediate practical
impact, as the portfolio level TCR results calculated either with or without inclusion of the free rider
effect is well above the ‘break‐even’ threshold of 1.0. However, the Commission Panel does
consider that this issue is likely to become a factor as the DSM initiatives of Terasen become more
fully developed and refined, and therefore should be addressed in this Decision.
The Commission Panel does not agree with Terasen’s position that “. . . the inclusion of the effects
of free riders in the cost‐benefit test for EEC programs distorts the value of EEC programs and is
counter to the objectives of the energy plan.” (Exhibit B‐1, pp. 85‐86) The Commission Panel
considers that it would be an unacceptable distortion to measure the effectiveness DSM programs
by giving credit to the programs for consumption reductions which, based Terasen’s own definition
(quoted above), would have taken place absent the incentive program.
The Commission Panel rejects Terasen’s proposal to exclude the free rider factor from program
effectiveness (TRC) calculations.
3.3 Attribution to Regulatory Changes
Terasen submits that once a proposed regulation and implementation date for minimum efficiency
standards for an appliance, building or energy system is announced by a regulating body, it be
permitted to attribute savings to market transformation programs for that particular appliance,
building or energy system in its cost benefit tests at that time. The proposal involves attributing
the savings to the program over a five year span, with adjustment for the level of Terasen’s support
for the market transformation and the level of financial contribution by others.