Energy Demand - Side Management: New Perspectives for a New Era

Carley, S., 2012. Energy demand-side management: New perspectives for a new era. Journal of Policy Analysis and Management 31.

Indiana University, Bloomington School of Public & Environmental Affairs Research Paper No. 2011-07-01

44 Pages Posted: 26 Jul 2011 Last revised: 2 Nov 2014

See all articles by Sanya Carley

Sanya Carley

Indiana University Bloomington - School of Public and Environmental Affairs

Date Written: July 26, 2011

Abstract

Over the past decade and a half, state governments have assumed greater responsibility over demand-side management (DSM) operations. Whereas DSM programs formerly were initiated primarily by utilities or state public utility commissions, they are now becoming increasingly state-initiated and incentivized through funding mechanisms or efficiency-level mandates. The supporting literature, however, has yet to respond to these changes, and to verify that DSM funding or mandates are effective policy mechanisms. Furthermore, the supporting literature has yet to resolve some of the research design and methodological challenges that traditionally plague DSM evaluations. As states continue to expand their energy and climate policy efforts, and the federal government considers the possibility of national decarbonization policies, of which DSM is a key strategy, the need for empirical research on the effectiveness of DSM programs will grow. This essay describes the current status of DSM efforts in the U.S. and explores how these programs affect electricity operations. The relationship between DSM policy and program efforts and the amount of saved electricity is tested, with a methodological approach aimed at minimizing selection bias that is inherent in the non-experimental research design. Results confirm that state-run DSM efforts contribute to electricity savings across the country. Public benefit funds coupled with performance incentives are found to encourage utility participation in DSM programs. Energy efficiency portfolio standards and performance incentives effectively promote electricity savings; but public benefit funds without the support of other DSM policies are not significant drivers of either DSM program participation or total DSM electricity savings.

Suggested Citation

Carley, Sanya, Energy Demand - Side Management: New Perspectives for a New Era (July 26, 2011). Carley, S., 2012. Energy demand-side management: New perspectives for a new era. Journal of Policy Analysis and Management 31., Indiana University, Bloomington School of Public & Environmental Affairs Research Paper No. 2011-07-01, Available at SSRN: https://ssrn.com/abstract=1895409 or http://dx.doi.org/10.2139/ssrn.1895409

Sanya Carley (Contact Author)

Indiana University Bloomington - School of Public and Environmental Affairs ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

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