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 1999, 848 electric utilities report having demand-side management (DSM) programs. Of these, 459 are classified as large, and 389 are classified as small utilities. This is a decrease of 124 utilities from 1998.⁽¹⁾ DSM costs were almost unchanged at 1.4 billion dollars in both 1998 and 1999.

Energy Savings for the 459 large electric utilities increased to 50.6 billion kilowatthours, 1.4 billion kilowatthours more than in 1998. These energy savings represent 1.5 percent of annual electric sales of 3,312 billion kilowatthours⁽²⁾ to ultimate consumers in 1999.

Actual peak load reductions for large utilities decreased in 1999 to 26,455 megawatts. Potential peak load reductions of 43,570 megawatts were an increase of 2,140 over 1998.

In 1999, incremental energy savings for large utilities were 3.1 billion kilowatthours, incremental actual peak load reductions were 2,263 megawatts.

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 76 billion kilowatthours.