DEMAND-SIDE MANAGEMENT AND ELECTRIC-POWER EXCHANGE

This paper derives the conditions for an electric utility's least-cost spending on demand-side management (DSM) programs. It also develops t he terms of trade for power import and for subsidizing DSM in another utility. The conditions are illustrated using the cost data collected for two utilities in the Western United States. Our findings suggest a n opportunity for a mutually beneficial exchange of DSM spending for e lectric power when the power 'exporter' operates under a DSM-spending budget constraint.