Category — Demand-Side Management

Although smart phones and computers make it easier to remember, last month Americans endured the semi-annual hassle of changing their clocks an hour. “Daylight Saving Time” (DST) was originally started during World War I to allegedly save energy. Jimmy Carter gave it to us in peacetime as part of his National Energy Plan. In practice, DST causes needless headaches—and even heart attacks!—and arguably doesn’t even save energy.

Chalk it up to yet another failed government intervention.

 The Hubris of DST

Joe Romm is not afraid to recommend society-changing government intervention in order to achieve a conservation goal, and he proposes drastic carbon legislation to prevent what he sees as “hell and high water.” Yet even this central planner hit the nail on the head when he complained: “You can’t save daylight by moving around the hands on your clock, of course. So daylight saving time remains as absurdly named as it ever was.”

For those who are skeptical of the current suite of climate models, Romm’s complaint is ironic. The same mindset that led government wartime planners to alter time, leads today’s planners to project what the global temperature will be in the year 2080.

The Harm of DST

There are many harms to DST. Most obvious, there is the hassle every household endures in actually changing the numerous clocks (microwaves, nightstand, watch, car, etc.). Although this doesn’t seem like a big deal, imagine if the federal government mandated that every U.S. citizen sit in a timeout corner for 15 minutes twice a year. Multiplied over hundreds of millions of people, that would add up to a significant waste of time, unless there were some corresponding benefit to the practice. [Read more →]

Editor Note: Demand-Side Management (DSM) is an electric-utility program where all ratepayers subsidize the energy conservation investments of those ratepayers who participate in the program. Dan Simmons, director of state affairs for the American Energy Alliance and for the Institute for Energy Research in Washington, D.C., submitted the following testimony in opposition to Georgia Power Company’s request to implement a DSM program.

Summary from Testimony: Market vs. Non-Market Conservation

Advocates of demand side management frequently overlook the human dimension. People make conservation decisions every day. Families are constantly striving to maximize the benefits they receive from using energy with the cost of using that energy.

Some economic analyses try to argue that ratepayers systematically misestimate the proper discount rate and therefore DSM is required to fix this error. But those analyses fall victim to assuming they know what’s best for ratepayers. The people who know best are ratepayers themselves. Only the individual ratepayer can decide how he or she best allocates their scare resources.

DSM leads to inefficient outcomes. It increases rates for all ratepayers, but only benefits a few of the ratepayers. Because history shows that DSM programs do not typically lead to the demand reductions claimed, they do not lead to lower electricity rates overall.

DSM is not new. It has been tried and studied for years. DSM is subject to the well known problems of the rebound effect, free riders, moral hazard, to name a few. Georgia Power’s 2010 Integrated Resource Plan and Application for Certification of Demand Side Management Programs analysis does not explain how this program will overcome these well-known economic problems nore does it explain how it will overcome the problems with Georgia Power’s DSM program from the 1990s. Without an analysis, it is difficult to believe Georgia Power’s DSM programs will achieve the benefits Georgia Power projects.

TESTIMONY

Q. PLEASE STATE YOUR NAME, TITLE AND BUSINESS ADDRESS.

A. My name is Daniel R. Simmons. I am the Director of State Affairs for the American Energy Alliance and the Institute for Energy Research, non-profit organizations that educate the public on energy policy. Our offices are located at 1100 H Street, Suite 400, Washington, DC 20005.

Q. PLEASE SUMMARIZE YOUR EDUCATION AND PROFESSIONAL EXPERIENCE.

A. I received a Bachelor of Science in Economics from Utah State University in 1998 and a Juris Doctorate from George Mason University School of Law in 2003. In 1998, I moved to Washington, D.C. and worked for the Competitive Enterprise Institute as an environmental policy analyst. In 2000, I went to work for the Committee on Resources of the United States House of Representative as a professional staff member. From 2002 to 2005, I was the Emmett McCoy Research Fellow at the Mercatus Center and from 2005 to 2008, I was the Director of the Natural Resources Task Director at the American Legislative Exchange Council. From 2008 and presently, I am the Director of State Affairs at the American Energy Alliance and the Institute for Energy Research. [Read more →]