An Approach to Conservation and Load Management Economic Analysis

This paper discusses a technique used by Northern States Power Company for the evaluation of conservation and load management alternatives. The technique involves examining the cumulative present worth of the avoided costs net of revenue effects due to proposed programs. The factors considered include annual revenue requirements for generation operation and maintenance, generation capacity, generation fuel inventory, transmission, distribution system, annual production cost, and revenue impact of the strategy being considered. The cumulative present worth of these factors when compared to base case alternatives yields an economic "figure of merit" for judging conservation and load management strategies.