We do not object to the assertion that a payback period longer than the expected useful life of a measure is indicative of important non-energy and non-program influencing factors. However, this singular address of an important issue falls short of a comprehensive treatment of appropriate screening criteria for program influence. Further, we assert that under an assumption of rational and fully informed decision-making, any payback (before incentives) that is shorter than the remaining useful life of the existing equipment indicates it is economically favorable to replace the equipment without need for incentives. Thus, for cases where rational decision making applies, incentives that do not financially induce existing equipment to cross a remaining useful life payback threshold also indicate no influence. We are familiar with the perspective of some program implementers, that customers have numerous competing high yield opportunities for capital investment and/or that business uncertainty implies a higher discount rate for future costs and benefits than those we apply in our models. However, under no circumstance should ratepayer incentives be applied where the simple payback period is less than 12 months before incentives. We adopt the influence” criteria proposed ”no with the addition of a minimum payback period, to balance the maximum payback period proposed in the table. The following is an excerpt from Section 4 of the guidance document, describing the meaning of “direct-to-default”: that the evidence is strongly suggestive of one of “Direct-to-default” the three outcomes and the burden of proof to justify another outcome is high. It is not definitive and does not guarantee an outcome but effectively reduces the rigor for additional requirements necessary to support the default baseline. This guide identifies seven such technology-program type-market combinations: Evidence Default Baseline C/I energy management systems that don’t fit in the category “add-on” C/I/Ag refrigeration
We do not object to the assertion that a payback period longer than the expected useful life of a measure is indicative of important non-energy and non-program influencing factors. However, this singular address of an important issue falls short of a comprehensive treatment of appropriate screening criteria for program influence. Further, we assert that under an assumption of rational and fully informed decision-making, any payback (before incentives) that is shorter than the remaining useful life of the existing equipment indicates it is economically favorable to replace the equipment without need for incentives. Thus, for cases where rational decision making applies, incentives that do not financially induce existing equipment to cross a remaining useful life payback threshold also indicate no influence. We are familiar with the perspective of some program implementers, that customers have numerous competing high yield opportunities for capital investment and/or that business uncertainty implies a higher discount rate for future costs and benefits than those we apply in our models. However, under no circumstance should ratepayer incentives be applied where the simple payback period is less than 12 months before incentives. We adopt the ”no influence” criteria proposed with the addition of a minimum payback period, to balance the maximum payback period proposed in the table. The following is an excerpt from Section 4 of the guidance document, describing the meaning of “direct-to-default”: “Direct-to-default” that the evidence is strongly suggestive of one of the three outcomes and the burden of proof to justify another outcome is high. It is not definitive and does not guarantee an outcome but effectively reduces the rigor for additional requirements necessary to support the default baseline. This guide identifies seven such technology-program type-market combinations: Evidence Default Baseline C/I energy management systems that don’t fit in the “add-on” category C/I/Ag refrigeration
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