It's a War Out There: A Gas Man Questions Electric "Efficiency".

Fortnightly Magazine - December 1996
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How the electric industry uses DSM and IRP to build load, ignoring basic truths found in fuel-cycle analysis.It was during the early 19th century that General von Clausewitz announced his nine principles of warfare. But he might have waited 100 years or so, to observe how 20th century electric utilities have taken ideas such as efficiency and conservation and turned them into marketing strategies that compete head on with natural gas.

Read on. In a book published in 1988, entitled "Strategic Marketing for Electric Utilities,"1 authors Clark Gellings and Dilip Limaye devote an entire chapter to the principles of von Clausewitz and how they apply in the case of electric utility programs such as demand-side management (DSM), integrated resource planning (IRP), and incentive rates for economic development.

Today we learn that "monopoly rate-of-return regulation of electricity has failed,"2 according to the "Electric Consumers' Power to Choose Act of 1996."

"The future is here," notes Federal Energy Regulatory Commission (FERC) chair Elizabeth Moler in Order 888. "And the future is competition. It is a global trend, and in North America, we are at the forefront of embracing it. There is no turning back."

Yet, certain anticompetitive aspects of well-intentioned studies of avoided costs and stranded investments should pose questions for those concerned with a level playing field. And the same goes for heightened efforts at environmental protection.

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