Electric Utility Demand Side Management: Defining and Evaluating Achievable Potential

Abstract

Projections of demand side management efficiency potential can inform electric utility program design and policy compliance. Beyond technology and cost, “achievable potential” estimates explore factors that facilitate end-use efficiency advances. This study compiles state level ex ante achievable potential estimates, explores estimation methods, and compares ex ante estimates with ex post energy efficiency load reductions. Quantitative analysis indicates that ex ante estimates and ex post reductions are correlated; they do not differ significantly. While ex ante estimates may appropriately estimate ex ante reductions, ex ante estimates are noisy and capture little variation in the ex post efficiency gains. Qualitative review of demand side management program evaluations identifies multiple factors absent from achievable potential estimates. Inclusion of these factors could refine achievable potential estimates. Generally, achievable potential estimates have improved over the past decade but remain hindered by inconsistency and oversimplified assumptions. This study provides a platform for continued clarification of achievable potential definitions and estimation methods. The importance of achievable potential accuracy grows with demand side management’s role in climate change strategy.