The Florida Supreme Court has upheld a decision by the state commission (PSC) to test the cost-effectiveness of demand-side management (DSM) programs for the state's four largest investor-owned electric utilities by measuring the impact of the programs on rates for all consumers, whether or not they participate in DSM programs.
It held the Rate Impact Measure (RIM) test consistent with state law directives to avoid discrimination between rate classes for DSM initiatives (em more so than the Total Resource Cost (TRC) test used alone.
The court said that state law required the PSC to gauge the overall effect of DSM on rates, generation expansion, and revenue requirement. It upheld the PSC's view that a TRC-based DSM portfolio would increase rates, but yield only a "negligible" improvement in energy savings as compared with the RIN test. Such analysis, the court said, illustrated a proper, broad-based view of cost-effectiveness, rather than a simple reliance on total energy savings. Legal Environ. Assist. Foundation, Inc. v. Fla. PSC, No. 85,204, Feb. 29, 1996 (Fla.).
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