CEA Demand-Side Management Strategies 2 — Questions and Answers
Question 1: Which metric best measures the cost-effectiveness of a utility DSM program from a societal perspective?
- Total Resource Cost (TRC) test (Correct answer)
- Ratepayer Impact Measure (RIM) test
- Participant cost test
- Program administrator cost test
Correct answer: Total Resource Cost (TRC) test
The Total Resource Cost test evaluates whether a DSM program's benefits exceed costs from the perspective of society as a whole.
Question 2: A commercial building installs automated blinds to reduce solar heat gain in summer. This is an example of which DSM strategy?
- Passive demand response
- Direct load control
- Passive energy efficiency (Correct answer)
- Fuel substitution
Correct answer: Passive energy efficiency
Automated blinds reduce cooling loads without active customer involvement by limiting solar heat gain, making this a passive energy efficiency measure.
Question 3: Under time-of-use (TOU) pricing, a customer's primary incentive is to:
- Reduce total annual energy consumption
- Shift load away from peak pricing periods (Correct answer)
- Install on-site generation
- Enroll in direct load control programs
Correct answer: Shift load away from peak pricing periods
TOU pricing creates financial incentives for customers to shift discretionary loads to off-peak hours when rates are lower.
Question 4: Which of the following best describes 'strategic load growth' as a DSM objective?
- Reducing total electricity sales to lower emissions
- Increasing electricity sales in applications that improve system load factor (Correct answer)
- Flattening the load curve by shifting peaks
- Reducing demand charges for commercial customers
Correct answer: Increasing electricity sales in applications that improve system load factor
Strategic load growth aims to increase electricity use in beneficial applications (e.g., replacing fossil fuels) that improve overall system efficiency and load factor.
Question 5: A utility offers rebates for ENERGY STAR-certified refrigerators. This program primarily targets which market barrier?
- Split incentive barrier
- First-cost barrier (Correct answer)
- Information barrier
- Behavioral barrier
Correct answer: First-cost barrier
Rebates reduce the upfront purchase price, directly addressing the first-cost or capital barrier that prevents customers from buying efficient equipment.
Question 6: Interruptible rate programs are most appropriate for which type of customer?
- Residential customers with smart thermostats
- Large industrial customers with flexible production schedules (Correct answer)
- Small commercial retail stores
- Hospitals and critical care facilities
Correct answer: Large industrial customers with flexible production schedules
Large industrial customers with flexible operations can accept service interruptions during grid emergencies in exchange for lower base rates.
Question 7: The 'free rider' problem in DSM programs refers to participants who:
- Use more energy after receiving an efficiency upgrade
- Would have taken the efficient action without the utility incentive (Correct answer)
- Drop out of demand response programs prematurely
- Shift load to neighboring utilities
Correct answer: Would have taken the efficient action without the utility incentive
Free riders claim program incentives for actions they would have taken anyway, reducing the net cost-effectiveness of the DSM program.
CEA Demand-Side Management Strategies 2
Which metric best measures the cost-effectiveness of a utility DSM program from a societal perspective?