ABSTRACT
All DSM options that would be considered for meeting a utility’s resource needs by lowering electrical demand at the utility’s peak hour will have three main characteristics. This chapter introduces these characteristics and discusses them in more detail. The administrative costs and incentive payments directly associated with a specific DSM option are those expenditures required to implement and operate a DSM program. The kilowatt (kW) reduction characteristic will be the sole driver of a number of additional types of utility system cost savings, many of which would be the result of avoiding the construction and operation of a new Supply option if a DSM option is chosen instead. The chapter examines the three specific types of changes in system fuel costs that will result from the introduction of a DSM option. The net impact of DSM on the utility system’s environmental compliance costs can also be viewed as a three-part calculation involving both reduced and increased environmental compliance costs.
