Least cost planning generally and DSM in particular

This paper assesses the increasing tendency of public utility regulators in the 1980s to require utility companies to practice ‘least cost planning’ and in particular to treat demand side conservation measures on a parity with expansion of supply. It discusses the magnitude and causes of the persistence of unexploited opportunities for efficient conservation. Its principal conclusions are that subsidies for conservation should be limited to the extent to which the marginal cost of electricity supply exceeds the price, and that conservation programs should minimize the cross-subsidization of participants by non-participants.