AIR-POLLUTION IMPACTS FROM DEMAND-SIDE MANAGEMENT

Air-polluting emission rates and energy-efficiency ratings vary widely among power plants, depending on location, age and whether the power plant is repowered. Traditional regulations require installation of sp ecified emission control equipment that varies among power plants. The se regulations do not specify that utilities first dispatch the cleane st power plants as demand varies from peak to off-peak periods. This e mpirical analysis shows, for 2 years out of 20, that demand-side manag ement (DSM) programs increase air pollution. One reason for this resul t is that regulations require installation of specific emission-contro l technology but do not provide the incentive to take actual emissions or their air quality impacts into account when operating the system. For certain types of air pollutants and in some regions, regulatory pr ograms now include markets for tradable emission credits. Such program s may alter this incentive.