Following Congressional approval of the Energy Policy Act of 1992 (EPAct), Rep. Ed Markey (D-MA), a key sponsor of the bill's electricity title, predicted that "competition should replace monopolism as the rule for much of the power industry. Consumers, renewable energy, and the environment will be much the better for it."
Since then, however, Markey's vision has fallen under a cloud. Concerns mount that competitive pressures will subvert environmental progress by forcing utilities to abandon programs for demand-side management (DSM) and renewable energy. These fears are buttressed by utilities from California to New York slashing DSM program budgets, citing competitive pressures. They turn to environmentalists for support in the plethora of restructuring debates, from retail wheeling to stranded costs.
Restructuring poses a serious problem for environmentalists. Over the years, many environmental advocacy groups have channeled their efforts through public utilities. Today, there's a real risk of blurring the distinction between protecting the environment and protecting the electric companies themselves. How can we protect the environmental gains achieved to date, while taking advantage of a changed marketplace?
When it comes to environmental programs, utilities have received the most publicity for DSM. Yet, on the whole, utility DSM expenditures account for just over one percent of total industry revenues. Energy savings represent just over one percent of energy sales. Indeed, the accomplishments of utility DSM appear small when compared with estimates of 25 percent and more for potential cost-effective increases in end-use energy efficiency.