Visit the Energy Systems Laboratory Homepage.
The Impact of Deregulation on Energy Conservation and DSM Measures
MetadataShow full item record
The regulated utility monopoly, with its defined and quasi-permanent rate schedules has, in many places, become a thing of the past. Therefore, determining the benefits of various facility operating options is no longer a straightforward calculation. In the new market, the economics of energy conservation and demand side management options will depend on price signals from the market. Unfortunately, the market is always changing and therefore affecting an end user's cost/benefit analysis. This problem is compounded by the fact that most, if not all, competitive energy service providers do not quote supply costs based on demand and energy costs. Rather, their quotes are for a fixed energy cost only, thereby eliminating any clear price signal to the end user to lower their demand. Given these problems, the following questions must be answered for energy service companies to compete in the new market: 1) What changes will energy service companies that are not affiliated with a facility's energy service provider, have to make to operate in this new world? 2) Will long term contracts be necessary to lock in the benefits of different options? 3) Can you still get pricing that is based on demand and energy rates? 4) What sort of pricing and price signals have users in the Texas market received thus far? 5) What known market indicators can energy service companies (ESCOs) watch to know when it is a good time to propose different options to customers? 6) What regulatory changes could affect economics in the future? 7) The goal of this paper will be to answer these questions based on input from market suppliers and actual pricing examples received by Texas end users for the 2002 open market. Also, strategies for dealing with energy service providers and obtaining the needed price signals will be discussed. Given that the new market structure will have to be dealt with from this point forward, now is the time to learn how to work with it, and maximize related business opportunities.
Brasovan, M. W. (2002). The Impact of Deregulation on Energy Conservation and DSM Measures. Energy Systems Laboratory (http://esl.tamu.edu); Texas A&M University (http://www.tamu.edu). Available electronically from