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Comments on: 'Demand-side management: reflections of an irreverent regulator' by Myron Katz

Article Abstract:

A demand-side management (DSM) strategy proposed by electric utility expert Myron Katz is criticized. DSM is described as measures intended to encourage consumers to calibrate their electricity demand in accordance with timing and current levels. DSM measures include promotional rates, real-time pricing and interruptible rates. Under the conservation plan proposed by Katz, consumers will pay for the costs of conservation since it is lesser than the current price of electricity and the costs of new generation capacity. It was concluded that this plan will benefit the utilities more than the consumers but is more advantageous compared to older conservation programs.

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Demand-side management: reflections of an irreverent regulator

Article Abstract:

The application of demand-side management to the electric utilities industry is analyzed. Demand-side management is described as the successful implementation of programmatic conservation measures in the industry. The US has significantly increased its energy productivity over the last two decades, an indication of the successful implementation of conservation measures. Conservation programs, however, still contain disincentives and inequities. A conservation strategy wherein consumers will be able to benefit from energy saved is proposed.

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Least cost planning generally and DSM in particular

Article Abstract:

Regulatory policies currently imposed on the electric utility industry are institutional and structural in nature. These policies shifts investment risks from consumers to investors because it emphasizes competition rather than regulation. In line with these policies, regulators have encouraged utilities to use least cost planning and to emphasize demand side management. Policies which emphasize structural rather than regulatory processes encourage social responsibility and are economically efficient.

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