(1) Integrated least cost resource planning and acquisition is an ongoing process that may be continually refined and improved. Utilities should continually assess existing barriers which could impede and incentives which could encourage efforts to engage in integrated least cost planning and resource acquisition. These efforts should be thoroughly documented to facilitate efforts to remove the barriers and integrate the incentives.

(2) Utility directed demand-side programs should be focused on specific sectors where market barriers or other market failures prevent demand-side resources from being effectively and efficiently developed. Marginal investment in conservation on the customer's side of the meter should be considered cost effective up to 115 percent of the utility's long-term avoided costs. The avoided cost, to which the 115 percent should be applied, should be based on the avoidable resources in the utility's integrated least cost resource plan.

(3) Except when the entire resource would be lost as a result, utility directed demand-side programs should not be focused on "cream skimming." The least expensive and most readily obtainable resource potential should only be acquired if other measures, which would be cost effective only if they are acquired in conjunction with those higher return resources, are also acquired.

(4) The commission realizes that the concept of least cost planning embraced by these guidelines involves a certain amount of utility investment which may never be attributable to a particular resource acquisition. This investment is needed if the least cost planning process is to function properly. No guarantee can be given that utilities will recover all costs put under the heading of "planning costs" or "portfolio development costs." However, rate recovery of planning and portfolio development costs will be allowed if, upon commission review, the utility's investment in planning and portfolio development is found to be reasonable.

History: 69-3-103; IMP, 69-3-102, 69-3-106(1), 69-3-201, MCA, ARM 38.5.2001; NEW, 1992 MAR p. 2764, Eff. 12/25/92.