In the early 1990's, before deregulation, the big issue for electric utilities was demand-side management [DSM], often pursued in the context of least-cost integrated resource planning efforts, to help customers reduce energy consumption in ways that were financially beneficial to the utility as well as the customer.Alas, with the move to competitive markets, energy efficiency largely got lost in the shuffle. Utility expenditures on DSM plummeted.
It appears that utility activism on energy efficiency has returned. Earlier this month, the Edison Electric Institute [EEI], the trade association for the electric utility industry, announced that it was creating a new institute for electricity efficiency. Last year, several utilities (and other energy industry leaders) launched a National Action Plan for Energy Efficiency.
Duke Energy (NYSE:DUK) is increasingly vocal about its view of energy efficiency as the "fifth fuel" -- after coal, natural gas, nuclear and renewables. PG&E (NYSE:PCG) runs its Pacific Energy Center in San Francisco to educate building professionals on energy efficiency technologies.
Renewables might be sexier, and in the long-run extremely important, but there's little that offers greater impact to address our energy and environmental challenges in the near-term than energy efficiency. Thankfully, we now seem to be getting the utility industry back on-message.