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DSM Programs Must Target Consumers, Not Just Technology

Fortnightly Magazine - January 15 1995

for residential customers. The incremental benefit of DSM at any one site is so small that budgets must be strictly maintained. Furthermore, residential consumers are not energy experts; they probably know very little about how they use energy. The technological applications may arrive in place, and yet the energy savings may not achieve predicted results. Consumers are only human.

To capture maximum benefits from DSM, both utilities and regulators must enter new terrain. Consumer education is where regulators can provide important leadership. As political institutions, regulatory agencies are risk averse. They make judgments in heavy political traffic, with failure seen as big news and success often going unnoticed. By refocusing DSM efforts on consumer education, regulators can help utilities improve results and rescue DSM programs tottering on the brink of extinction.

Educate, but Verify

Consumer behavior has a powerful impact on energy efficiency. A study conducted at Princeton University, for example, demonstrated that energy use at identical townhouses with identical appliances varied by as much as 100 percent. The researchers attributed the variance primarily to differences in consumer behavior.2 Consumer behavior in just one area (em space heating (em accounted for one-quarter of all energy savings in the residential sector in 1986, totaling one quad.3 Effective consumer education should em-phasize the long-term benefits of energy efficiency to counter the inconsistent, short-term signals of the market.

Two studies by the Alliance to Save Energy have demonstrated that adding intensive energy education to weatherization programs can produce significant energy savings. In one case, Pennsylvania Electric Company (Penelec) tested three approaches to incorporating education in a low-income weatherization program (see Figure 1). Penelec customers who watched a video and participated in three home visits increased their savings to 16.4 percent, in contrast to 8.4 percent for the control group. In the second study, the Alliance worked with Niagara Mohawk Power Corp. and the New York State Weatherization Assistance Program to add three in-home education sessions (plus a setback thermostat and affordable payment plan) to an existing weatherization program. Participating households cut energy use by 25.7 percent, versus 16.3 percent under the standard program (see Figure 2). Other programs also show promise, such as the Neighborhood Energy Workshops in Minneapolis and Ontario Hydro's energy management program. These programs stress certain key actions:

s Go Public. Make usage visible; publicize success.

s Customize Data. Each house is different.

s Slow Down. Choose three to six programs; nobody needs 100 ways to save energy.

s Respect Privacy. Houses use energy; people live in them.

s Let Business Lead. Business and government must support energy efficiency through public activities.

s Track True Savings. Don't focus just on home visits.

Evaluations that focus strictly on consumer action are new for utility DSM programs. They force utilities and regulators to redefine what is measured and how. General insights from sociology, psychology, anthropology, human ecology, and economics will play a larger role in designing or creating new DSM tools such as: 1) survey questionnaires, 2) sampling strategies, 3) interview techniques, 4) market delivery strategies or financial incentives, and 5) analytical models.