Equity, efficiency, and effectiveness in DSM rate design

摘要: Unfortunately (from a demand side management (DSM) perspective, that is), utilities do not sell electricity-related services - they electricity, and customers own the electricity-using equipment. This raises troublesome possibility of income transfers between non-participants participants in DSM programs. paper focuses on transfer problem means for easing it through two-part rate. rate design is governed by three critical decisions: (1) extent to which program costs are recovered from participant, targeted class, utility's as whole; (2) bill reductions (including incentives) reflect avoided costs; (3) effectiveness (e.g., market penetration) be taken into account making these cost/benefit allocation decisions. The set decisions can thought lying continuum bounded two polar cases: maximize recovering lost revenues all utility customers, leaving adopters with maximum net reduction; efficiency equity participants, setting their equal costs, non-participantsmore » unaffected. Problems exist both strategies. As authors describe, strategy poorer richer segments ratepaying public lead economically inefficient use resources. suggests compromise, allowing subsidies enter form unrecovered costs. In order make following exposition more understandable, first consider case where price greater than its marginal cost, then less cost.« less