Electric-utility DSM programs in a competitive market
During the past few years, the costs and effects of utility demand-side management (DSM) programs have grown sharply. In 1989, US electric utilities spent 0.5% of revenues on such programs and cut total electricity consumption by 0.6%. By 1992, these numbers had increased to 1.3% and 1.2%, respectively. Utility projections, as of early 1993, of DSM expenditures and energy savings for 1997 were 1.7% and 2.5%, respectively. Whether this projected growth comes to pass may depend on current debates about deregulation of, and increased competition in, the electric-utility industry. This report examines the factors likely to affect utility DSM programs in a more competitive environment. The electric-utility industry faces two forces that may conflict with each other. One is the pressure to open up both wholesale and retail markets for competition. The net effect of such competition, especially at the retail level, would have much greater emphasis on electricity prices and less emphasis on energy services. Such an outcome would force a sharp reduction in the scale of DSM programs that are funded by customers in general. The second force is increased concern about environmental quality and global warming. Because utilities are major contributors to US carbon dioxide emissions, the Administration`s Climate Change Action Plan calls on utilities to reduce such emissions. DSM programs are one key way to do that and, in the process, to cut customer electric bills and improve economic productivity. This report discusses the forms of competition and how they might affect DSM programs. It examines the important roles that state regulatory commissions could play to affect retail competition and utility DSM programs. The report also considers the effects of DSM programs on retail electricity prices.
- Research Organization:
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Sponsoring Organization:
- USDOE, Washington, DC (United States)
- DOE Contract Number:
- AC05-84OR21400
- OSTI ID:
- 10145188
- Report Number(s):
- ORNL/CON-384; ON: DE94010517
- Resource Relation:
- Other Information: PBD: Apr 1994
- Country of Publication:
- United States
- Language:
- English
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