Electric Utility Demand-Side Management 2000

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Executive Summary

Background

Demand-side management (DSM) programs consist of the planning, implementing, and monitoring activities of electric utilities that are designed to encourage consumers to modify their level and pattern of electricity usage.

In the past, the primary objective of most DSM programs was to provide cost-effective energy and capacity resources to help defer the need for new sources of power, including generating facilities, power purchases, and transmission and distribution capacity additions. However, due to changes occurring within the industry, electric utilities are also using DSM to enhance customer service. DSM refers only to energy and load-shape modifying activities undertaken in response to utility-administered programs. It does not refer to energy and load-shape changes arising from the normal operation of the marketplace or from government-mandated energy-efficiency standards.

Current Status

In 2000, 962 electric utilities report having demand-side management (DSM) programs. Of these, 516 are classified as large, and 446 are classified as small utilities. This is an increase of 114 utilities from 1999.⁽¹⁾ DSM costs increased to 1.6 billion dollars from 1.4 billion dollars in 1999.

Energy Savings for the 516 large electric utilities increased to 53.7 billion kilowatthours (kWh), 3.1 billion kWh more than in 1999. These energy savings represent 1.6 percent of annual electric sales of 3,413 billion kWh of reported sales ⁽²⁾ to ultimate consumers in 2000.

Actual peak load reductions for large utilities decreased in 2000 to 22,901 megawatts. Potential peak load reductions of 41,369 megawatts were a decrease of 2,201 from 1999.

In 2000, incremental energy savings for large utilities were 3.3 billion kWh, incremental actual peak load reductions were 1,640 megawatts, and incremental potential peak load reductions were 3,162 megawatts.

Fluctuations in DSM data can be directly attributed to the changes that are occurring in the electric utility industry. In California, the California Board for Energy Efficiency (CBEE) was created to fund energy efficiency programs that had previously been funded by electric utilities. Utilities in California report their costs associated with and energy savings resulting from CBEE programs. In New York and Vermont, the opposite is true. Therefore, the numbers reported below are not included in the DSM database and tables.

Since 1998 the New York Energy Research and Development Authority (NYSERDA) has managed the New York Energy $martSMprogram, which is funded through a systems benefit charge. This program offers consumer education and assistance programs to increase the energy efficiency in New York. In 2000 the Energy $martSMprogram savings of 580,300 MWh were realized with an estimated peak load reduction of 137.4 MW.⁽³⁾ As of March 31, 2001, 147.2 million dollars had been spent since late 1988 when the Energy $mart Program was initiated.

Efficiency Vermont is Vermont's "Energy Efficiency Utility" which operates independently of the states electric utilities. Efficiency Vermont "provides a more streamlined and coordinated approach to energy efficiency." Efficiency Vermont reports that their energy efficiency programs resulted in energy savings of 20,142 MWh and peak load reductions of 2.2 MW at a cost of 5.4 million dollars in 2000.⁽⁴⁾ Of these energy savings, 47 percent were in the residential sector, while approximately 30 percent were in the commercial sector, and the remainder in the industrial sector.

The drop in the "Other" sector actual and potential peak load reduction and Federal ownership actual and potential peak load reduction can be attributed to a Federal utility discontinuing a load control program. In addition, factors such as weather variations, can influence fluctuations in actual peak load reductions.

Reminder: It is no longer possible to directly compare 1998 - 2000 data with data from prior years as the threshold for small and large utilities was changed. Small utilities in 1998 - 2000 are classified as having sales for resale and sales to ultimate consumers of less than 150 million kilowatthours.For 1997 and prior years, small utilities were classified as having sales for resale and sales to ultimate consumers of less than 120 million kilowatthours.

¹  Large utilities are those reporting sales to ultimate consumers or sales for resale greater than or equal to 150,000 megawatthours. Small utilities with sales to ultimate consumers and sales for resale of less than 150,000 megawatthours are only required to report incremental energy savings and peak load reduction, and total utility and total DSM costs for the reporting year.

²   Includes unregulated retail sales by energy service providers of 103.8 billion kilowatthours.

³  Quarterly Report, December 2000. New York Energy $Mart ^SM Program Evaluation and Status Report.

⁴  Schedule V – Demand Side Management Information”. Non-Utility Organization – Efficiency Vermont.

Rodney Dunn (202/287-1676)
Internet E-Mail: rodney.dunn@eia.doe.gov