Demand-Side Management (DSM) faces new challenges as the industry works to meet expanded goals for energy efficiency and demand response. In this September 2011 article featured in AESP’s monthly newsletter, Managing Director, Daniel Violette, argues the development of DSM resources that help ratepayers meet their energy needs as a part of a least cost portfolio will likely not occur until DSM is mainstreamed within a utility and the overall energy industry as an important line of business – just like distribution and generation.
Electric and gas utilities have worked under the long-standing paradigm that allows for earnings on capital intensive investments. However, regulators and industry stakeholders are now asking utilities and energy providers to take a different approach to business – one that requires the provision of services into a market. This can be viewed as a change in the regulatory compact between utilities and ratepayers. Now, future energy needs are to be met by a mixture of capital investments and market services where both provide significant business challenges to the utility.