Lawrence J. Hill

Residential time-of-use pricing as a load management strategy: Effectiveness and applicability

Abstract Innovative electricity pricing is increasingly used as a load management strategy by Western utilities. The most common type fall into the general class of time-of-use (TOU) tariffs, which are used alone or in conjunction with other demand-side programmes for load management: to shave peak load and/or shift load from peak to offpeak periods. Although they are more widely applied to higher-voltage users, TOU tariffs have proven to be cost-effective for certain types of residential loads. This paper addresses TOU pricing and the residential sector, discussing customer response to the tariffs, costeffectiveness, and applicability for implementation by utilities outside of the industrialized world.

Federal tax effects on the financial attractiveness of renewable versus conventional power plants

Abstract In this paper, we examine the effects of federal tax laws on the financial attractiveness of seven renewable and four conventional electric power generating technologies adopted by investor owned utilities (IOUs) and non-utility electricity generators (NUGs). The results show that federal income tax laws applicable to renewable generating technologies generally provide very attractive financial incentives for the adoption of these technologies by IOUs and NUGs. If an IOU or NUG is subject to the alternative minimum tax, however, it may not be able to take full advantage of these financial incentives.

The process of integrating DSM and supply resources in electric utility planning

Abstract Electric utilities increasingly look to the demand side to supplement traditional supply resources for meeting future energy and demand growth. The process of assessing the relative costeffectiveness of demand and supply resources involves two activities: (1) selecting an integrating method, and (2) deciding how to treat the three dimensions of resources (ie, financial, economic, and reliability). This paper looks at the integrating processes used by electric utilities in their short- and long-term planning. Although some evidence on the relationship between the way resource dimensions are treated and resource selection exists, little is known about the relationship between using different integrating methods and resource selection. Since integrating methods vary from the simple to the complex with a corresponding increase in cost to a utility, the paper concludes with a research agenda that will clarify the relationships between using different integrating methods in electric utility planning and the types of resources selected

From DSM technologies to DSM programs: Issues in demand-side planning for electric utilities

We argue that it is more appropriate to compare demand-side management (DSM) programs, rather than DSM technologies, with supply resources in electric utility integrated planning. To accomplish this, DSM technologies must be identified and screened for appropriateness in a given service territory. Then, the technologies must be converted into DSM programs and screened again for cost-effectiveness. The discussion of important features of this process in this paper is illustrated by the experiences of U.S. electric utilities. We conclude that not enough is known about 1.(1) mechanisms for effectively converting DSM technologies into DSM programs and2.(2) the trade-offs between DSM program costs incurred by utilities and customer-participation rates.

Issues in assessing the cost-effectiveness of coordinated DSM programs

Abstract Coordinated demand-side management (DSM) programs, co-administered by government agencies and electric and gas utilities, are likely to grow in importance in the coming years. Because of the unique features of these types of DSM programs, special care must be taken in assessing their cost-effectiveness. In this paper, we discuss these features, suggest how standard cost-effectiveness measures must be adapted to accommodate them, and show how important these adaptations are in assessing the cost-effectiveness of coordinated programs. At first, we use a least-cost, financial approach. The discussion indicates that failure to account properly for the special features of coordinated programs materially affects estimates of cost-effectiveness and, in extreme cases, may lead to rejection of otherwise cost-effective programs. Then, extending the analysis to include economic factors, we speculate that most types of coordinated programs are more attractive than when evaluated on a financial basis.

Estimating the Cost-Effectiveness of Coordinated DSM Programs

Coordinated demand-side management (DSM) programs—jointly funded, designed, and implemented by government agencies and electric and gas utilities—are likely to become much more widespread in the future. Because of the comingling of government and private funds in these types of programs, estimating their cost-effectiveness for electric and gas utilities is more difficult than for typically utility-run DSM programs. In this article, we describe and illustrate a methodology for estimating the cost-efffectiveness of coordinated programs from the standpoint of the electric or gas utility. Although the discussion is limited to DSM programs cofunded by government and electric and gas utilities, the principles can be used for other types of programs cofunded by the government and firms in the private sector.

Standard practice: Estimating the cost-effectiveness of coordinated DSM programs

The purpose of this document is to describe and illustrate a methodology for estimating the cost-effectiveness of coordinated demand-side management (DSM) programs, extending California {open_quotes}standard practice{close_quotes} to address the special evaluation challenges arising from these programs. A coordinated DSM program is one that is co-administered by a state or local government agency and a gas or electric utility. Although the primary subject of this document is coordinated low-income programs, the principles are easily extended to estimating the cost-effectiveness of all coordinated programs.

The role of allocation functions in energy modeling: A review

Abstract In the recent past, there has been a proliferation of technical models developed to describe the relationships between and to forecast the levels of energy-related magnitudes. Although the models vary widely in their structural features and objectives, they share at least one common attribute: an energy allocation problem. That is, the models predict an aggregate level of energy usage (often by type) and policy decisions require this prediction be made at a disaggregate level — either with respect to components of the equilibrium quantity demanded or with respect to the quantity supplied. By distinguishing the various problems of disaggregation this paper evaluates four methodological approaches that are commonly utilized in representing the energy allocation problem in the production sector of energy models. These approaches are evaluated in the context of the neoclassical theory of production with special emphasis given to the problems posed by aggregation over both inputs and micro-units and the effects of the formulation of short-run versus long-run dynamics.

Is policy leading analysis in electric restructuring

Abstract Much of the discussion about electric restructuring focuses on the benefits of wholesale and retail competition, ignoring other features of markets that could impinge on economic efficiency. The author discusses five such features that policymakers should consider before choosing a restructuring path.

Federal tax incentives and disincentives for the adoption of wood-fuel electric-generating technologies

Abstract In this paper, we estimate the effects of current federaltax policy on the financial criteria that investor-owned electric utilities (IOUs) and non-utility electricity generators (NUGs) use to evaluate wood-fuel electric-generating technologies, distinguishing between dedicated-plantation and wood-waste fuels. Accelerated tax depreciation, the 1·5 ¢/kWh production tax credit for the dedicated-plantation technology, and the alternative minimum tax are the most important tax provisions. The results indicate that federal tax laws have significantly different effects on the evaluation criteria, depending on the plants ownership (IOU vs NUG) and type of fuel (dedicated-plantation vs wood-waste).