Miriam Pye

1994

Abstract

The intent of this handbook is to introduce the reader to business aspects of Demand-side Management (DSM) at electric utilities, define relevant terminology, and direct the reader to more in-depth literature on DSM issues. Geared toward students and those who are new to DSM, this compilation of literature lays a foundation that will facilitate comprehension of more complex DSM issues.

DSM encompasses a wide variety of actions taken by utilities to modify their customers' energy demand. Among these are programs that:

- reduce energy use (e.g., efficient buildings, equipment and processes);
- redistribute energy demand to spread it more evenly throughout the day (e.g., load shifting, innovative rates), and
- encourage strategic load growth (e.g., electrification programs).

Utilities accomplish such goals by using rebates, audits, loans and free installation of energy-efficient equipment, among other options.

Demand-side management along with supply-side management are components of integrated resource planning (IRP) or least-cost planning (LCP), which is used by power utilities to satisfy energy needs while minimizing costs to the consumer, utility and environment. The appeal of DSM is different for the various parties involved. Through DSM, utilities avoid or delay the expense of building new power plants; can utilize smaller-scale, and therefore more flexible, resources; and build more favorable relationships with the public and regulatory agencies. These attributes reduce resource costs to customers by lowering utility expenses. The flexibility provided by DSM makes the portfolio of resources less sensitive to unanticipated changes in economic growth, fuel prices and power plant construction costs than supply-side resources alone.

Environmentalists seek to lessen pollution and environmental degradation through involvement in DSM. Energy conservationists see DSM as a means to increasing utility commitment to cost-effective energy efficiency.

This handbook focuses on demand-side management that promotes energy conservation and efficiency. More specifically, focus is placed on DSM's business aspects -- those aspects that transform energy conservation and efficiency into viable business decisions with potentially significant impact.

Click to order hard copy.

90 pp., 1994, $18.00/U943

Return to Top