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Demand-side Management: Mitigate, Don't Eliminate

Fortnightly Magazine - October 1 1995

absent verification that short-term DSM rate impacts will threaten competitive

position. t

Jeremy Levin was project coordinator with the Alliance for Affordable Energy, a nonprofit consumer advocacy group in Louisiana. He is currently a master's candidate in M.I.T.'s Technology and Policy Program.

Carrot and StickDSM can help retain customers that might otherwise stray to find a cheaper energy source.

Rochester Gas & Electric Co. recently convinced the University of Rochester not to install a 1-Mw cogeneration system by offering a $2-million incentive payment for an $8-million energy-efficiency program, in return for an agreement by the University to stay on RG&E's system for at least seven more years. Hirst, "Electric Utility DSM Programs in a Competitive Market," Oak Ridge National Laboratory, April 1994, at page 21.Stranded ExpectationsLouisiana Power & Light recently abandoned its first filed least-cost integrated resource plan because of "fundamental changes ... in the Company's expectations about the future environment."* LP&L withdrew its plan without demonstrating any proof of an actual new environmental--just a change in the Company's expectations. LP&L's withdrawal has cost the ratepayers of Louisiana $255 million in lost savings,# a significant abandoned benefit. *Motion to Withdrawn Application for Approval of Least-Cost Integrated Resource Plan and For Approval of Experimental Time-Of-Use Rate, filed July 18, 1994, p. 2.

#LP&L Least Cost Integrated Resource Plan, Executive Summary, LA PSC Dkt. U-20178, Dec. 1, 1992, p. 47.1 Florida PSC Docket Nos. 93548-EG, 93549-EG, 93550-EG, April 28, 1994, Direct testimony, p. 21.

2 Nadel, Jordan, Holmes & Neal: Using DSM to Help Meet Clean Air Act Targets: A Case Study of PSI Energy, ACEEE, October 1994.

3 E.g., Moscovitch, "DSM in the Broader Economy: the Economic Impacts of Utility Efficiency Programs," The Electricity Journal, May 1994.

4 Pye & Nadel, "Rate Impacts of DSM Programs: Looking Past the Rhetoric," ACEEE, April 1994.

5 Pye & Nadel, p. 17.

6 Resolution on Competition, the Public Interest, and Potentially Stranded Benefits, sponsored by the Committee on Energy Conservation, NARUC, Nov. 14, 1994.

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