Demand Side Management: Principles and Fundamentals

New book will be a primer on DSM solutions

by Penni McLean-Conner

Energy seems to be on everyone’s mind these days, from my neighbor down the street who just completed a home energy audit, to the newly formed town energy committee–and regulators, legislators, demand side management program administrators and energy service companies.

My new book is designed to be a primer for the many stakeholders interested in demand side solutions. “Demand Side Management: Principles and Fundamentals” is framed in three parts–the creation of a DSM culture, delivering DSM to consumers, and optimizing DSM performance. Here’s a brief summary of those three topic areas.

Creating a DSM culture

What elements are needed to create a DSM culture? Program administrators expanding existing DSM programs or building brand-new ones must create a DSM culture that is grounded in a solid business case. A successful culture will understand how programs and portfolios of programs move through the DSM life cycle to ultimately achieve market transformation. Policy frameworks provide the infrastructure for sustainable DSM.

A successful DSM culture starts by building a business case for demand side management that defines demand side management and outlines the benefits and barriers to demand side management.

The DSM life cycle involves design, implementation and evaluation. This life cycle must to be understood both from a program and portfolio perspective in order to deliver high-value programs to consumers while achieving savings goals.

Creating a framework that funds and supports investment in DSM is achieved via policy, particularly as DSM relates to utilities. This is vital, because with policy, the inherent conflict between the incentive to increase sales and the societal goals of increasing end-use efficiency can be overcome by aligning utility and public interests. Policy creates the framework by which DSM is funded and operated.

Delivering DSM to consumers

This section takes a broad view of DSM and covers delivery processes needed not only for energy efficiency but also for demand response and distributed generation.

To be successful, all DSM service delivery models need to be based on a market assessment that provides in-depth understanding of targeted audiences, including information on current energy profiles and end-use applications, plus how investments in energy solutions are valued. A market assessment is the foundation when designing cost-effective programs to which consumers will respond.

Delivering energy efficiency programs to the residential and commercial markets is challenging. Effective program design for both markets involves defining the programs, communication channels and delivery channels.

DSM goes beyond energy efficiency to include demand response and distributed generation. Demand response is a tool that not only helps manage the grid during peak times, but provides customers with an opportunity to gain energy savings on their bills. Distributed generation, which involves generating electricity close to where it is used, is growing as a way to address energy costs, environmental concerns and grid reliability. Delivering demand response and distributed generation to consumers requires an understanding of the technologies, applications and barriers.

Optimizing DSM performance

How is demand side management performance optimized? To gather new ideas, program administrators can participate in regional and national organizations. Evaluation protocols are used to identify performance gaps and recommendations to bridge the gaps. As program administrators work to optimize performance, they do so with an eye toward the future to ensure they are well-positioned to succeed in the long term.

Active participation in regional and national organizations like the Consortium for Energy Efficiency or the American Council for an Energy Efficient Economy can advance DSM programs. The roles the organizations play in advancing DSM range from advocating policy to completing research and development.

Increasingly, demand side management programs are being considered an energy resource that results in more reliance on delivering savings. Evaluation processes are the tool by which programs are reviewed and assessed from the perspective of delivering planned savings.

Ultimately, optimizing the programs means successfully positioning them for the future. Successful DSM leaders will be looking at the latest people, processes and technology trends to ensure their programs are positioned to leverage the trends.

Applying the principles and fundamentals of demand side management will provide benefits for customers, utilities and the environment. The most successful program administrators will work in an environment that values DSM, will delivery high quality DSM programs, and will continually improve program delivery.


Penni McLean-Conner is the vice president of customer care at NSTAR, the largest investor-owned electric and gas utility in Massachusetts. McLean-Conner, a registered professional engineer, serves on several industry boards of directors, including the Massachusetts Technology Collaborative and CS Week. “Customer Service: Utility Style,” was published by PennWell Books and her new book, “Demand Side Management: Principles and Fundamentals,” will be available soon.

Previous articleELP Volume 86 Issue 5
Next articleFERC incentives support increased grid investment

No posts to display