The American Gas Association (A.G.A.) has issued A Strategic Guide to IRP and DSM for Natural Gas Companies, prepared by Hampton Strategies, Inc. Because the evolution of IRP and DSM initiatives for electric and gas companies will be greatly affected by increased competition, the report contends, natural gas companies need to be familiar with issues and practices surrounding DSM cost recovery and profitability incentives. It adds that recovery of direct program costs, lost revenues, and profitability incentives from ratepayers remains an effective source of revenue that electric utilities can use to enhance their competitive position. The report urges the gas industry to consider similar funding scenarios.
Some obvious and not-so-obvious competitive threats and opportunities arise from electric utility-sponsored IRP and DSM programs. Obvious threats include incentives for electric heat pumps and water heaters, but the report warns that gas utilities must also prepare to deal with more subtle threats, which include internal and trade ally infrastructure building, informational programs that "slant" the message to favor electricity, and information gathering through monitoring and evaluation.