Resources for the Future will illuminate for government officials and stakeholders from business and the environmental advocacy community the true potential of demand-side management (DSM) programs and recommend policies to make those programs successful. Annual investments in DSM programs for electricity are measured in billions of dollars, funded directly through electricity rates or through wires charges that finance public benefit funds. Do these investments yield an adequate return for society in general and for electricity customers in particular? With utility deregulation, the responsibility for operating DSM programs is shifting from utilities to state agencies, making the public nature of DSM more explicit and reviving discussions over funding levels and the design of specific programmatic elements. Equally important, the desire to reduce carbon dioxide emissions associated with global climate change has increased the relative attractiveness of meeting demand by increasing energy efficiency, rather than by increasing supply fueled by coal or natural gas. Resources for the Future is committed to trying to narrow the divide between those who argue that DSM programs can help meet electricity demand cost-competitively and those who argue that the cost of these programs is underestimated and their effectiveness overstated.
Energy conservation is receiving heightened interest because of high energy prices, global warming, and energy security. Demand-side management programs can encourage conservation by enabling consumers to reduce energy use by improving the energy efficiency of buildings and household appliances (everything from light bulbs to refrigerators), as well as by providing information on changes in behavior that can reduce consumption. RFF will recommend policies to promote energy conservation in a cost effective and consumer-friendly manner.