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Rocky Mountain Power asks Utah PSC to clarify rule requiring DSM programs to pass five cost tests
Summary
Rocky Mountain Power told a Utah Public Service Commission technical conference that changes in technology and costs have made it difficult to design demand-side management programs that pass the five standard cost-effectiveness tests in a 2009 order and proposed clarifying the language or holding a technical workshop.
During a teleconference with the Utah Public Service Commission, Rocky Mountain Power officials said the utility can no longer reliably design its demand-side management (DSM) programs to “pass all five standard cost effectiveness tests” required by a 2009 commission order and asked regulators to consider clarifying the rule or convening a technical workshop.
Clay Monroe, managing director of customer solutions for Rocky Mountain Power, told commissioners the five tests — the utility cost test (UCT), the total resource cost test (TRC), the Pacificorp-modified TRC (PTRC), the participant test and the ratepayer impact measure (RIM) test — provide different lenses on program benefits and costs. He said that as low-cost measures such as LED lighting have become baseline practices, the portfolio has shifted toward higher-cost measures such as HVAC and building-envelope improvements, and “we have not passed the total resource test … now for 3 years running.”
Monroe said the company had discussed options with its DSM steering committee and presented three paths: keep the current language and continue providing justifications when tests are not met; change the order’s language to reflect current conditions; or pursue deeper, technical refinements to how inputs and benefits are calculated. “We’re happy with the status quo. We’re happy to clean up the language or … look at much deeper cost-effectiveness,” Monroe said, offering Rocky Mountain Power’s help to facilitate a public technical workshop.
Patrick Greco, assistant attorney general representing the Division of Public Utilities, pushed back on what he called a misreading of the 2009 order, saying the order requires reporting the five tests and “for any that don’t pass, you provide a justification for why it’s still in the public interest.” That exchange framed a broader discussion by commissioners and staff about regulatory expectations for prudency reviews and the timing of reviews in the DSM process.
Commissioners and staff questioned how DSM measures are treated in integrated resource planning (IRP) models, whether IRP assumptions and avoided-cost inputs align with TRC calculations, and whether DSM still represents a least-cost option when TRC results fall below 1.0. Participants noted volatility in recent years — including higher HVAC equipment and labor costs after the pandemic and supply-chain disruptions — that have reduced measured cost-effectiveness. Rocky Mountain Power said avoided-cost inputs come from its IRP and that updates to avoided costs would be reflected when the utility files new runs.
The Division of Public Utilities and commissioners also raised procedural concerns: prudency reviews for DSM spending occur retroactively after program years close and after third-party evaluations, which limits front-end scrutiny. Commissioners asked for greater upfront transparency and sensitivity analyses showing how results change with different input assumptions.
No formal regulatory change or vote occurred during the teleconference. Participants agreed to consider scheduling a technical workshop and to file comments or proposals; Rocky Mountain Power said it would provide more detailed inputs and facilitate further technical discussion if requested. The teleconference concluded with staff to determine next steps and potential scheduling for a workshop or further filings.
