Counting the Capacity that Didn't Hatch: The Rate Mitigation Effect of DSM Programs

Minnesota’s electric utility efficiency programs have saved approximately 68,000 GWh of electricity since 1992.1 This conserved energy, which has been called “negawatts,”2 can be considered a system resource analogous to a new power plant. It allows utilities to serve their projected load with available supply resources by reducing demand rather than increasing supply.

Using Xcel Energy as a case study, this analysis compares the cost of Demand Side Management (DSM) programs to the revenue requirements of new central generation resources that would have been built had customer demand not been reduced. Results show that DSM programs have a revenue benefit to all ratepayers, since they keep costs down overall, allowing customers to save on the energy they do use as well as the energy they don’t. This webinar will provide an analysis overview, highlighting how the effects on revenue differ from the levelized cost calculations currently used, and how historical and ongoing benefits from DSM program activity might be framed in the future.  

Target Audience

  • Utility DSM managers
  • Energy policy experts
  • Policy-makers

Webinar Outline

  • Compare Demand Side Management scenario to a power plant scenario
  • Looking more in-depth at the following avoided costs:
    • Power plant displacement
    • Transmission infrastructure displacement
    • Average Measure Life of equipment and relevant avoided costs
  • Summarizing Results
If you missed the live webcast, you can click through the slides or download a recording below.

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Counting the Capacity that Didn't Hatch: The Rate Mitigation Effect of DSM Programs

 

Presenter Bio

 

Jenny Edwards is the Program Manager of CEE’s Innovation Exchange. She joined CEE in 2010 with over ten years of diverse energy analysis and planning experience. She has researched renewable and energy efficiency policy in the context of California’s energy crisis, reported on natural gas development in the state of Alaska, and examined alternatives to state planning mechanisms for offshore wind development in the northeast US. She holds a B.A. in physics from UC Berkeley and a Master’s in City Planning from MIT.

*This analysis was presented at the 2013 ACEEE Energy Efficiency Conference on Energy Efficiency as a Resource in Nashville, TN.

1 Calculated using first-year savings data provided by the Minnesota Department of Energy Resources, assuming an average 15-year measure life across utility programs, through 2011 reporting. 

2 A term coined by Amory Lovins in his 1990 paper “The Negawatt Revolution.”