The Economics of Conservation Programs

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Demand side management (DSM) focuses on energy conservation and peak load reduction through various measures funded by electric utilities. Originating from the Public Utility Regulatory Policy Act of 1978, DSM aims to set energy conservation as a national goal, prompting regulatory commissions to develop utility conservation programs. The 1992 Energy Policy Act emphasizes integrated resource planning, ensuring DSM is treated equally with supply. However, implementation varies significantly across states, influenced by factors such as the Clean Air Act of 1990, leading to diverse approaches in energy management.