Total Resource Cost (TRC) Test

  A ratio used to assess the cost effectiveness of a demand-side management program. Although this economic desirability test provides information about the relative merits of different DSM programs, several important issues are not addressed in this analysis. First, this cost-effectiveness test does not indicate the level of program participation that will be achieved. Second, the most cost-effective mix of DSM technologies is not determined by this test because this methodology only evaluates one specific measure at a time. Finally, these tests are static; they do not include a feedback mechanism to account for changes in demand due to the DSM program. The TRC Test measures the ratio of total benefits to the costs incurred by both the utility and the participant. The TRC test is applicable to conservation, load management, and fuel substitution technologies. For fuel substitution technologies, the test compares the impact from the fuel not selected to the impact of the fuel that is chosen as a result of implementing the technologies. The TRC Test includes benefits occurring to both participants and nonparticipants. Benefits include avoided supply costs (I.e. transmission, distribution, generation, and capacity costs). Costs include those incurred by both the utility and program participant.