Low gas prices present a significant challenge to justifying gas energy efficiency (“EE”) programs, since the primary benefit of gas EE, as calculated in a cost effectiveness test, is the avoided gas cost. Given the critical role avoided gas costs play in cost effectiveness tests, we might have expected by now that the industry (i.e., regulators, advocates and EE planners) would have settled on one universally accepted approach to calculating avoided gas costs. But the industry hasn’t, creating an environment where the approach taken to avoided costs may not be aligned with a utility’s objectives and situation.
Four alternative avoided gas cost methodologies are in use today. Which method does your utility currently use? Which approach should your utility be using? Read the full paper to learn about the different approaches, their relative strengths and weaknesses, and strategic questions for utilities to ask when choosing their preferred approach.Download the white paper on avoided gas costs