| A preliminary national-level analysis was conducted to determine whether Demand Side Management (DSM) programs introduced by electric utilities since 1992 have made any progress towards their stated goal of reducing peak load demand. Estimates implied that DSM has a very small effect on peak load reduction and there is substantial regional and end-user variability. A limited scholarly literature on DSM also provides evidence in support of a positive effect of demand response programs. Yet, none of these studies examine the question of how DSM affects peak load at the micro-level by influencing end-users' response to prices. After nearly three decades of experience with DSM, controversy remains over how effective these programs have been. This dissertation considers regional analyses that explore both demand-side solutions and supply-side interventions. On the demand side, models are estimated to provide in-depth evidence of end-user consumption patterns for each North American Electric Reliability Corporation (NERC) region, helping to identify sectors in regions that have made a substantial contribution to peak load reduction. The empirical evidence supports the initial hypothesis that there is substantial regional and end-user variability of reductions in peak demand. These results are quite robust in rapidly-urbanizing regions, where air conditioning and lighting load is substantially higher, and regions where the summer peak is more pronounced than the winter peak. It is also evident from the regional experiences that active government involvement, as shaped by state regulations in the last few years, has been successful in promoting DSM programs, and perhaps for the same reason we witness an uptick in peak load reductions in the years 2008 and 2009. On the supply side, we estimate the effectiveness of DSM programs by analyzing the growth of capacity margin with the introduction of DSM programs. The results indicate that DSM has been successful in offsetting the need for additional production capacity by the means of demand response measures, but the success is limited to only a few regions. The rate of progress in the future will depend on a wide range of improved technologies and a continuous government monitoring for successful adoption of demand response programs to manage growing energy demand. |
