Considering Equity When Making Decisions in Distributed Energy Resources

Synapse worked in collaboration with Lawrence Berkeley National Laboratory and E4TheFuture to prepare guidance on how to account for equity when conducting benefit-cost analysis for distributed energy resources. The guidance document is a follow-up and a companion document to the National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources.

The guidance document describes how distributional equity analysis (DEA) can be used to complement benefit-cost analysis (BCA). DEA uses much of the same methods, data, and assumptions as BCA but differs in two important respects. First, DEA separates electricity customers into two distinct categories, including priority populations and all other customers. Priority populations are those customers that have suffered from, and continue to suffer from, disproportionate systemic costs and burdens from energy extraction, generation, transmission, distribution, and consumption.  Second, DEA uses a set of metrics designed to indicate equity impacts on priority populations relative to other customers. These equity metrics might include, for example, energy rates, energy bills, participation in DER programs, energy burden, number of shutoffs for non-payment, non-energy benefits to participating customers, health impacts from electricity and gas, impacts of greenhouse gas emissions, and more.

The Guidance Document was supported by an Advisory Committee composed of many of the leading experts working on energy equity around the US. It is intended for a wide range of stakeholders including utility regulators; utilities; consumer advocates; environmental regulators; State Energy Offices; environmental justice advocates; DER advocates; consultants; academic and research institutions; and others. The Guidance Document provides step-by-step guidance on how to conduct a DEA and how to use the results of both BCA and DEA to make decisions on utility investments in DERs. 

You can find the document here: Lawrence Berkeley National Laboratory.