Association for Public Policy Analysis & Management

Renewable energy is on the rise in the U.S. Additional efforts will be required to integrate intermittent and decentralized sources of energy into the electrical grid. Given that electricity storage in large amounts at reasonable cost is not yet available, electric power actors must match supply and demand at every moment. Thus, time in which electricity is used becomes ever-more important. Demand-side management (DSM) allows to shift customer load profiles and reduce peak load demand (programs incentivizing changes in electricity consumption by energy end-users at specific times reflecting the system needs). This increases reliability of the electric power grid, reduces transmission constraints, lowers price volatility in wholesale electricity markets, helps integrate renewable and distributed energy sources, and reduces CO² emissions.

Despite DSM resources are of great importance to the functioning of the electrical grid, they are still insignificant players in the U.S. electricity sector. The study’s objective is to examine barriers and facilitators of DSM at the state level. First, state-level secondary data regarding DSM is examined (publicly available data sets, public reports, public testimony, websites and materials related to relevant stakeholder organizations). Next, two U.S. states that represent diverse cases are purposefully chosen for in-depth case studies. A panel of stakeholders (state legislatures, state executive agencies, public utility commission, electric utilities, consumer advocates, energy-management firms, environmental groups, representatives of small commercial customers) in each state will be interviewed to conduct information on design and implementation of DSM. Interviewees are selected through purposive sampling (assuring the representation of all main stakeholder groups). A systematic search (targeted newspaper search, public reports, public testimony, review of websites and materials related to relevant stakeholder organizations) is conducted in each state to identify relevant documents to DSM. Stakeholders with the highest citation number within each stakeholder category are selected for initial contact. In addition, snowball sampling will be conducted to supplement the systematic search sampling. Data analysis will involve transcribing and thematic coding of the interviews (extracting primary codes from the existing literature and adding secondary codes emerging from the data). The study will consider how market structure, policy incentives, technological structure and stakeholder perceptions of the end-users influence design, implementation and outcomes of DSM. The study will conclude with several policy recommendations that might help improve DSM practices.