Discounting the Benefits for Natural Gas Utility Energy Efficiency Programs

Abstract

Throughout the United States, utilities frequently offer incentives and rebates to customers to upgrade equipment and install improved building measures on homes and businesses to reduce energy consumption. For utilities to offer such programs, per regulatory and legal requirements, they often must follow guidelines to be cost-effective running through cost-benefit tests. The costs to operate such programs are straightforward and most often entail just a one-time expenditure. In contrast, the benefits can vary widely depending on discount rate, projected fuel costs, societal impacts from less consumption, and the life-cycle of the program.