The effect of conservation programmes on electric utility earnings: Results of two case studies

This paper develops methods to measure the impact of conservation programmes on electric utility earnings. The methods are applied to two case studies. Detroit Edison represents a case where impacts are unfavourable. This utility has ‘excess capacity’ which is only made worse by conservation. Pacific Gas and Electric represents a case where conservation helps defer the need for new capacity. Even in this case, programmes targeted at summer peak demand are more beneficial than those which save baseload energy. Conditions determining the earnings impact of conservation are complex, involving regulatory factors that are specific to individual utilities.     

Measuring the benefits and costs of utility conservation and load management programmes

We have learned much less than we could have from utility operation of conservation and load management programmes. Our general ignorance concerning the performance (ie benefits and costs) of these programmes exists because we have not devoted sufficient resources to careful evaluations of past and present programmes. We need to build evaluation into the programme planning and implementation process and we should use actual electricity and gas bills to measure programme performance. Finally, we should conduct well designed experiments to learn what does and does not work.     

A simpler method for calculating the cost of conservation subsidies for an electric utility

This article presents a highly aggregated method of calculating the cost of conservation subsidies for an electric utility company. The cost is expressed in terms of the company's total expenditures on subsidies versus the reduction in electricity demand due to customers' extra conservation investments. We argue that the highly aggregated method would serve as a useful complement to the detailed programme by programme calculations normally performed to determine conservation cost-effectiveness. The simpler method is demonstrated with an application to the conservation programmes of the Pacific Gas and Electric Company.     

The social-psychological foundations of successful energy conservation programmes

In spite of high potential for saving energy in US buildings, adoption rates for residential conservation technologies have been low. Research in the social and behavioural sciences helps to explain these low adoption rates and suggests strategies for improving conservation delivery systems. The authors propose a social diffusion model as a useful conceptual framework for analysing the spread of conservation devices. This formulation stresses the importance of existing social networks, focusing on the transmission of vivid and personal information from credible sources and the modelling of the behaviour of trusted others. A review is presented of successful utility, government and community conservation programmes that address the complexities of human information processing and make special efforts to overcome structural barriers to participation by all energy consumers. Exemplary programmes are identified and a checklist is provided for use in conservation programme planning, implementation and evaluation.     

Evaluating utility residential energy conservation programmes: an overview of an EPRI workshop

The Electric Power Research Institute sponsored a two-day workshop, ‘Measuring the Effects of Utility Conservation Programs’, in February 1982. The workshop featured 10 presentations by electric utility analysts on several subjects related to evaluation of utility residential energy conservation programmes. This paper summarizes the major themes and findings of the workshops. The workshop papers are published in the Proceedings, available from EPRI.     

Electric utility energy conservation and load management programmes: R & D opportunities

During recent years, electric utilities have begun a variety of new programmes to manage their future load growth. In many cases, these conservation and load management (C/LM) programmes serve as alternatives to traditional electricity supply resources. Additional development of planning, analysis and evaluation methods is needed before utilities can fully rely on these C/LM programmes as legitimate electric system resources. This paper discusses several important research topics. These topics include better use of data from evaluations of C/LM programmes to improve demand forecasting models, development of models to predict participation in future utility C/LM programmes, review of existing integrated resource planning models, assessment of alternative regulatory treatment of C/LM programmes by state public utility commissions, and identification of better ways to disseminate results on effective C/LM programmes among utilities.     

Energy conservation programmes: The analysis and measurement of their effects

Over the past decade, energy conservation programmes have been used extensively by US utilities. However, during much of this period, their popularity has been uncritical — insufficient programme evaluation was available to indicate whether the programmes were economically reasonable or not. In the past three years, however, a substantial array of evaluation results have become available. Much of this evaluation has been stimulated by the Electric Power Research Institute (EPRI). EPRI's initial contribution to the process was a watershed workshop in 1982 on the effects of utility residential conservation programmes. Since then, EPRI and a variety of utilities, public agencies and private consulting groups have continued to refine and extend the evaluation process. This paper reviews the programme evaluation process begun with the 1982 EPRI workshop and discusses the extent and validity of its methods and findings.     

Efficient lighting programs in Europe: Cost effectiveness,consumer response,and market dynamics

Since 1987 more than 50 utility-sponsored programs in 11 European countries have offered financial incentives to promote energy-efficient compact fluorescent lamps (CFLs). Roughly 7.4 million households were eligible for the programs and together they acquired about 2.5 million CFLs. Data from 40 of the programs show that the average societal cost of conserved energy is 2.1 cents/kWh, including 0.3 cents/kWh for program administration and marketing, far less than the cost of building and operating new electric power plants. The highest penetration rates and the most cost-effective programs result when utility companies pay a high proportion (or all) of the cost of the efficient lamps. Data on lamp choice, placement, and utilization are presented along with a characterization of participants and non-participants. Survey results show that lamp prices can be a more important influence on consumers' choice of efficient lamps than the price of electricity. Non-economic factors such as environmental protection are as important as economic factors in determining participation. Market barriers, such as product shortages, are discussed along with appropriate remedies. Finally, differences between the European and the U.S. experiences are outlined.     

Residential energy conservation: Analysis of US federal programmes

The authors examine three residential energy conservation programmes under study and development by the US government. These programmes include setting appliance efficiency targets, developing new thermal standards for housing, retrofitting existing houses to improve thermal performance and a stronger energy conservation programme. The programmes are compared using a model developed for the FEA and ERDA which projects consumption up to the year 2000. The major conclusion is that the programmes can save both energy for the USA and money for individual households.     

Stimulating energy conservation The use of the opinion leadership process

While the US federal government, public utilities and oil companies, among others, have instigated programmes to educate the general public on energy conservation and to stimulate an energy conservation ethic, results of a number of surveys indicate that such efforts in promoting energy conservation have had only limited success. This may be particularly attributable to the low credibility ascribed by the public to energy information disseminating sources. This article investigates the feasibility of utilizing opinion leadership, an untried approach, to overcome the credibility problem in disseminating energy information to the general public.     

Federal—state conservation programmes: The states' assessment

The federal conservation programmes administered by the states have received remarkably little evaluation on a systematic, multi-state basis, even though they have become the principal government conservation delivery efforts in the USA. In this study the states' assessment of the programmes is provided, along with their recommendations for change. The consensus is that the conservation efforts are basically sound and cost-effective endeavours that need greater and more consistent funding, refinement and, in some cases, changed emphasis. The assessments suggest several messages for energy conservation programme design and underscore the need for more rigorous, quantitative evaluation to defend and improve government initiatives.     

Energy-efficiency research, development and demonstration : New roles for US states

At least eight states have established energy research, development and demonstration (RD&D) programmes. In contrast to federal and utility energy RD&D, most states emphasize applied research on end-use efficiency and renewable energy. States also try to closely link research and technology deployment, in some cases deliberately blurring the line between the two. The states discussed in this paper spend about US$39 million per year for energy RD&D, or one-fifth of the US Department of Energy (DOE) budget for conservation and renewable energy RD&D. When indexed per capita or per energy dollar, the average rate of state RD&D spending on conservation and renewables is about 65–75% that of the US DOE.     

Measuring energy savings — problems

The contribution of government energy conservation programmes to reducing national energy is an important but largely unresolved issue. This paper discusses estimating the energy-savings impact of US Department of Energy (DOE) conservation programmes. Programme-by-programme estimates of energy savings have been analysed, the results indicating that DOE conservation programmes have reduced US energy use by more than 0.5 quadrillion British thermal units (quads) annually since 1981. Limitations in the available evaluative information, however, preclude reaching unambiguous conclusions.     

Evaluating the impact of the Michigan RCS home energy audit program

A comprehensive evaluation was conducted of the Michigan Residential Conservation Service (RCS) home energy audit program. Using a combination of telephone interviews and utility company fuel consumption records, the impact of the RCS program was assessed. Results indicated that participants rated the service very positively and also subsequently performed more energy conservation actions than a randomly selected comparison group, with low and moderate cost actions appearing to be most affected. Convergence among three alternative methods of analyzing fuel consumption impacts indicated a net energy savings of approx. 3% of heating fuel use of audit participants.     

The importance of regret minimization in the choice for renewable energy programmes: Evidence from a discrete choice experiment

This study provides a methodologically rigorous attempt to disentangle the impact of various factors – unobserved heterogeneity, information and environmental attitudes – on the inclination of individuals to exhibit either a utility maximization or a regret minimization behaviour in a discrete choice experiment for renewable energy programmes described by four attributes: greenhouse gas emissions, power outages, employment in the energy sector, and electricity bill. We explore the ability of different models – multinomial logit, random parameters logit, and hybrid latent class – and of different choice paradigms – utility maximization and regret minimization – in explaining people's choices for renewable energy programmes. The “pure” random regret random parameters logit model explains the choices of our respondents better than other models, indicating that regret is an important choice paradigm, and that choices for renewable energy programmes are mostly driven by regret, rather than by rejoice. In particular, we find that our respondents' choices are driven more by changes in greenhouse gas emissions than by reductions in power outages. Finally, we find that changing the level of information to one attribute has no effect on choices, and that being a member of an environmental organization makes a respondent more likely to be associated with the utility maximization choice framework.     

Measuring and monitoring energy poverty

This article undertakes a review of alternative measures and indicators of energy poverty targeted to specific audiences and for particular purposes. At the national and international scales there have been some efforts for constructing measures of energy poverty. However, much more needs to be done to develop an internationally consistent measurement framework and to put in place data collection systems that will enable regular reporting. At the programme and project level, indicator systems by necessity need to be designed for specific purposes. Nevertheless, the article proposes that in many instances it is desirable to widen the scope of metrics used for designing and evaluating policies and programmes. In the past, monitoring and evaluation indicators have focused largely on outputs, service delivery or dissemination. Central to the recommendations laid out in the paper is the call for widening the focus of evaluation and necessity to design indicators that adequately assess the needs of beneficiaries and describe the living conditions of families and communities, who are targeted by such programmes and initiatives.     

Residential conservation incentives

This article analyses existing knowledge of consumer response to conservation incentives for energy efficiency. It criticizes the treatment of incentive effects in existing energy demand models and reviews the literature on three questions that have been given insufficient attention in formal analyses of energy demand: How does the size of an incentive affect energy users' responses? Are different types of incentives (eg, rebates, loans, grants) perceived differently even when they have the same economic value? What non-financial features of financial incentive programmes influence their effectiveness? Finally, it discusses approaches to resolving such questions.     

Energy conservation programmes A review of state initiatives in the USA

In the USA states have initiated four types of non-utility programmes to promote energy conservation and renewable energy: tax incentives, grant and loan programmes, regulations and standards, and research and development programmes. Based on a survey, there is a wide variation among the states in the extent to which these programmes have been initiated and implemented. The states have conducted few evaluation studies assessing the effectiveness of their programmes. There appear to be two factors influencing a state's involvement in these programmes: the dependence of the state on outside energy sources and the political nature of the state.     

Achieving global environmental benefits through local development of clean energy? The case of small hilly hydel in India

Energy and development are closely intertwined. Yet, increasing fossil fuel-based energy consumption contributes significantly to environmental problems both locally and globally. This article explores the interlinkages between local livelihood and environmental benefits from the provision of energy to remote rural households through small hydropower development. The analysis is based on research carried out around a large development project designed to assist the Government of India in the optimum utilization of small hydropower resources in the Himalayan and sub-Himalayan regions. There are about 100,000 villages in India that are not connected to electricity supply, many of them in the hilly regions with ample hydropower potential. The project aimed to demonstrate the utility of and options for providing electricity to such villages through clean mini-hydro. The article addresses the nature of the impacts of the demonstration small hydel schemes on the local communities, to what extent they translate into environmental benefits both locally and globally, and the perceptions and participation of the local communities in these small hydro schemes. The study explores the impacts of the schemes on financial capital, natural capital, social capital, physical capital, human capital, and gender equity in the local communities. It further provides a discussion on the links between local and global environmental benefits. Overall, it is found that the schemes’ impacts both on the local communities and the environment are mostly marginally positive or neutral, although achieving clearly demonstrable benefits would require major upscaling of the effort involving broader changes than possible under this project. Furthermore, it is argued that some of the assumptions behind the project design were faulty. Involvement of the local communities and direct livelihood benefits to them are essential for the long-term sustainability of the small hydro schemes. The discussion and conclusions are intended to provide guidance to programmes and projects that aim to promote environmentally sound energy in the rural areas of developing countries.