7.6.3 Utility Programmes
Under some conditions, utilities--the electricity, natural gas, and thermal
energy supply organisations--can play significant roles in market transformation.
Public utilities are given special powers, such as limited monopolies in their
service territories, and the right to use eminent domain to obtain easements
for their distribution networks. In turn, they are subject to varying forms
of regulation, including the approval of the tariff rates that they charge to
different classes of customers. The role of utilities places them in a unique
position to deliver energy efficiency and renewable energy programmes to their
customers. They are a source of technical expertise in the supply and use of
energy; are in regular contact with their customers; and are in a strategic
position to aggregate customer demand to introduce new technologies.
Despite these advantages, utilities historically have had a disincentive to
encourage energy efficiency. In the past--and continuing in many jurisdictions--the
profits earned by utilities have been based on the volume of their energy sales.
In this regulatory climate, if a utility encourages efficiency successfully,
its sales and earnings decline. To correct this disincentive, a number of national
and state governments are adopting utility reforms. Regulatory programmes are
being changed to require utilities to carry out energy efficiency programmes
and to allow them to earn a profit on these services--the traditional demand-side
management (DSM) model. Where utility restructuring is taking place, utilities
are under competitive pressure to reduce costs, which has reduced their investments
in DSM programmes. To preserve these programmes, some restructuring legislation
is experimenting with mandatory "line" charges-surcharges on each
kWh of electricity carried on a transmission line-to create special funds for
DSM services, including energy efficiency and renewable energy investments and
subsidies for low-income customers.
The features that made utility DSM programmes successful--the technical expertise
of utilities and their customer contacts--have lead to the transfer of utility
programmes among countries. In Brazil, a comprehensive national electricity
conservation programme, PROCEL, conducts R&D, energy audits, equipment testing
and rating, and educational campaigns (Geller, 1997). In Thailand, a DSM programme
has been initiated through cooperation between the utility and manufacturers.
In China, DSM is integrated into a Sustainable Future programme. The rapidly
increasing cross-boundary investments in utilities is increasing the potential
of this form of technology transfer.