Evaluation of resource impact factors versus social cost estimates in determining building energy performance standard levels

In order to increase the welfare of society through the implementation of a building energy-performance standard, a method is required by which the least-cost means of obtaining the desired space conditioning of a building can be estimated. In other words, a life-cycle cost model must be developed to simulate the energy-related building-design decisions that would take place if resources were being allocated efficiently. The cost-minimizing model must incorporate technically efficient conservation strategies and fuel-conversion equipment, and the prices used must reflect the social value of the fuels and capital equipment used. This report explores the feasibility of developing a factor that could be used to adjust a design energy budget to account for the external costs associated with that energy consumption. One such factor, RIF (resource impact factor) has been proposed by ASHRAE. Though ASHRAE suggested the RIF x RUF (resource utilization factor) multiplier concept, RIF's were not explicitly defined. Weber (1978) suggested that RIF be defined as a ratio of social costs to effective market price. The basis for a RIF used in conjunction with a RUF is evaluated here and is found lacking. To fill the gap, a social-cost approach is developed that addresses the goals of both RIF's and RUF's. The rationale for using such an approach stems from the existence of differences between retail prices and the actual social costs of fuels.