Issues in demand-side management programs operated by electric utilities in the United States

There are hundreds of utility demand-side management (DSM) programs that have operated in the United States since the early 1980s. Conservation and load management programs have enrolled hundreds of thousands of residential utility customers and thousands of commercial/industrial customers. According to the Energy Information Administration, electric utilities in the United States spent $2.8 billion on DSM programs in 1993. Many issues have arisen as a result of the implementation of these programs, and this paper examines four key factors: supplier and customer perspectives; DSM implementation problems; the role of kW demand savings; and engineering estimates, political estimates, and reality. Each of these factors can have a critical role in the success or failure of DSM programs. Due to communication barriers between departments at some utilities, many of these issues can go unresolved until third parties step into the picture and point out discrepancies. As daunting as some of these challenges appear, there are practical solutions that can make DSM programs more cost-effective for the utility and more attractive to customers. These solutions should help progressive and proactive utility companies in the future deregulated market