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Must DSM Programs Increase Rates?

Fortnightly Magazine - June 15 1995

to 2030. Imposed on electricity consumption, such a tax would roughly double the price of electricity (that is, the tax would be equivalent to almost 8›/Kwh).

DSM programs often increase electricity prices, but the effects are quite small, both in absolute terms and relative to the many other factors that affect electricity prices. Thus, the threat of increasing competition, by itself, should not deter utilities and their regulators from acquiring cost-effective DSM resources. t

Eric Hirst and Stan Hadley are researchers at Oak Ridge National Laboratory. They specialize in electric industry issues, including resource planning, demand-side management, and industry restructuring. Hirst holds a PhD in mechanical engineering from Stanford University, and Hadley holds master's degrees in nuclear engineering and engineering management from the University of Missouri-Rolla.


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