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.
The Florida Supreme Court has upheld a decision by the state commission (PSC) to test the cost-effectiveness of demand-side management (DSM) programs for the state's four largest investor-owned electric utilities by measuring the impact of the programs on rates for all consumers, whether or not they participate in DSM programs.
It held the Rate Impact Measure (RIM) test consistent with state law directives to avoid discrimination between rate classes for DSM initiatives (em more so than the Total Resource Cost (TRC) test used alone.
demand-side management (DSM).1
With broad-based support from utilities, consumer representatives, environmentalists, the California Public Utilities Commission (CPUC), and the California Energy Commission (CEC), some $1.8 billion has been spent since 1990 (and $
Electric utilities nationwide are attempting to retreat from commitments to energy efficiency (em a retreat that will benefit few customers, while damaging many. This retreat is driven by fear of retail wheeling (em that consumers will be able to shop for the lowest prices among competing entities. In turn, the threat of retail wheeling has spurred utilities to a frantic scramble to cut costs and trim rates.
PV technology combined with storage offers a cost-effective alternative to capacity additions.By John Byrne,
Young-Doo Wang,
Ralph Nigro, and
Steven E. Letendre
Until recently, both regulators and electric utilities have considered photovoltaic (PV) technology (i.e., solar cells) an unattractive
energy-supply option because of its relatively high cost. Now, however, a number of utilities have shown interest in using PV for peak-shaving.
(TRC) test has become the dominant method of comparing the costs and benefits of demand-side management (DSM) programs. Yet the TRC test fails to recognize the negative rate impacts from reduced kilowatt-hour consumption. DSM advocates argue that more extensive DSM programs will compensate for this flaw. If all customers have an opportunity to participate in a DSM program, they claim, customers' total bills will fall in spite of rising rates that pay for the DSM investments.
As competition in the electric industry increases, so does utility concern about the effect of demand-side management (DSM) programs on electricity prices. Because DSM programs often raise prices, several utilities have recently reduced the scope of their DSM programs or focused these programs more on customer service and less on improving energy efficiency (see sidebar). Whether all utilities should follow suit is, however, open to question. We contend that DSM programs do not always exert upward pressure on prices (em just sometimes.
In setting utility conservation goals, the Florida Public Service Commission (PSC) has decided to permit the state's electric utilities to eliminate demand-side management (DSM) programs that increase rates for nonparticipating customers.