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Bidding Opportunities for Energy Efficiency
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With the adoption of a rule requiring electric utility solicitation for new resources, the Public Utility Commission of Texas set the stage in 1992 for demand-side bidding. Regulated electric utilities are now required to issue a request for proposals for energy efficiency and load management options from energy service companies and utility customers. Competitive bidding presents industrial customers with a new menu of energy services. Customers have opportunities to develop proposals for on-site energy savings and to bid for payments up to the system avoided costs in much the same fashion as qualifying facilities have been able to secure contracts for power generation. Self-service wheeling may also be formally considered as an alternative to new capacity additions. The breadth of the new markets which might develop and the nature of the opportunities for large industrial customers is unclear at this time. Competitive bidding opportunities for industrial customers may improve our industrial competitiveness, increase customer participation in utility resource planning, improve the equity of demand-side management programs, and help regulators to insure that regulated electric utilities provide low-cost, reliable energy services. Demand-side bidding is likely to bring fresh new perspectives to the regulation of planning and licensing in Texas. The experiences gained in the current solicitations will aide in the refinement of the process within the context of an integrated resource planning rulemaking.
Treadway, N. (1994). Bidding Opportunities for Energy Efficiency. Energy Systems Laboratory (http://esl.tamu.edu). Available electronically from