THE TOTAL-COST AND MEASURED PERFORMANCE OF UTILITY-SPONSORED ENERGY EFFICIENCY PROGRAMS

By examining the actual perfommance of conservation or demand-side man agement (DSM) programs for ten utilities, Joskow and Marron (1992) hav e made an important contribution to policy discussions about the wisdo m of relying on utilities to improve customer energy efficiency. We us e Joskow and Marron's method to analyze twenty utility commercial ligh ting programs and, like Joskow and Marron, find wide variations in ind ustry reporting practices and savings evaluation methods. We extend th e method by systematically accounting for several of the most importan t sources of variation and comment on how they influence total program costs. Our accounting also allows us to relate remaining program cost variations to the program sizes and the electric supply costs avoided by the programs. We draw qualified, yet affirmative, conclusions rega rding the cost effectiveness of the programs.