Peak Demand Impacts From Electricity Efficiency Programs

Quantification of the costs and benefits of electricity efficiency programs have focused largely on the economic value of annual energy reductions. State public utility commissions PUCs and utilities are increasingly interested in assessing peak demand impacts of these programs. The U.S. Energy Information Administration defines peak demand as "The maximum load during a specified period of time." In practice, utilities and grid operators use a wide range of definitions for peak demand.

With increasing need for a more flexible and resilient electricity system, and changing costs for generation, utilities and other efficiency program administrators must take into account all characteristics of efficiency programs — including peak demand reduction — to ensure a reliable system at the most affordable cost.

In this study, Berkeley Lab explored a new metric, the program administrator (PA) cost of saving peak demand (PA CSPD). We collected data on costs, energy savings and peak demand savings for electricity efficiency programs for 36 investor-owned utilities and other PAs in nine states (Arizona, Arkansas, California, Colorado, Illinois, Massachusetts, Maryland, New York and Texas) for 2014 to 2017. While some utilities report demand reductions for their electricity efficiency programs, there has been little sustained effort in the United States to gather peak demand reduction data or benchmark the cost of achieving peak demand impacts. As a first of its kind analysis, we developed a framework for analyzing peak demand savings across utilities and states and begin to quantify the cost of saving peak demand.