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Demand-Side Management: Government Planning, Not Market Conservation (Testimony of Dan Simmons Before the Georgia Public Service Commission)

By Daniel Simmons -- May 20, 2010

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.…