The fact you've singled out this one business (utilities) from among many qualified possibilities to deliver your proposed service makes me somewhat nervous.

Actually, electrical contractors and all other energy service providers including Orion can currently do energy efficiency projects while in pursuit of sales and profits. This means they have an incentive to do just what you suggest.

Whereas, utilties are the only group, which has a built-in sales and profit disincentive, without any up-side in most states. All I am suggesting is that we rectify this.

As for your nervousness, I think you stop worrying about who does the energy efficiency heavy-lifting as long as the results are real.

Steve

I still think that the best deal can come from free markets, without price controls, on which competitive retailers will do the heavy lifting, by segmenting customers with plans which combine both (they are interrelated) demand response and energy efficiency.

As I have mentioned in discussions before, industrial management is far from incompontent simply because it does not choose to implement efficiency initiatives. In our experience, when companies have to chose between captial investments in additional production capacity and energy efficiency initiatives, they are going to tend to production investments. This stems not from incomptence but from an ingrained pre-disposition to invest in capital projects. We have seen numerous well-run companies struggle with the decision, only to be pushed over the top by incentives from the utilities.

Moreover, your arguement that every consumer pay "large sums to rectify the disincentive condition" holds little or no water. For one thing, most consumers who are subject to a systems benefit charge, face one that is a fraction of their total bill. Additionally, whether you wish to see it or not, all consumers do benefit from the reduction of electricity consumption in the form of reduced needs for additional load expansion, which means fewer power plants.

"If the savings are real" argument is also hard understand. A critical mass of research is building from all over the country, NYSERDA, the Northeast, the Midwest and California have all shown that energy efficiency is significant way to reduce demand and control load growth. For excellent example of this, a recent publication by the The Hewlett Foundation, No Reason to Wait (December 2005).

Again, I look forward to see your arguments against utility sponsored energy efficiency in a full length article and discussion.

While I truly favor free markets for most goods and services, I have yet to find a competitive solution to the "last mile" problems for telecommunications and energy. In addition, you certainly must have noticed that the U.S. and most of the 50 states have retreated from deregulation over the last five years, because of reckless acts of manipulation by Enron, et al.

This is a long way of saying that my article is dealing with the real world of 2005-2006 and not some hypothetical free market experiment.

As for your point about monopolies ( and the "outdated business model "), the solution lies with state regulators who establish aggressive energy efficiency standards for the utilities so that everyone benefits from meeting those requirements.

Steve

I understand that the telecommunication business has a problem with the last mile. However, I have proposed elsewhere that the electricity industry has a problem with the first minutes. The problem with the first minutes results when customers are not able to respond to prices, and is resolved with demand response. It was precisely the lack of demand response that lets spot prices increase beyond reasonable values, leading to generator market power and congestion.

If I understand correctly, states now are supposed to study how useful demand response is, and the most important application is precisely to implement retail deregulation. To have a real social impact, states regulators should look deeply into liberating retail markets again.

I believe to have understood what is needed to design a true deregulation model for the electric sector. Dr. Alfred Kahn said some time ago that: "I am worried about the uniqueness of the electricity markets. I've always been uncertain about eliminating vertical integration. It may be one industry in which it works reasonably well."

That uniqueness is associated with the non-lineal nature of the risk of system failure. Physical risk of system failure, linked to high prices in deregulated systems, used to be managed as a supply security risk under vertical integration. The apparently large costs of generation and transmission reserves required, under vertical integrated utilities from resulting risk management planning, became the target of inefficiency identified by economist and policy makers at the outset of deregulation.

By reducing reserves and creating congestion, here and there, long run risk of failure was thus increased by deregulation of wholesale markets and incomplete deregulation of retail markets. Associated with the physical risks was increased value destruction, and unstable markets. I believe those to be the structural reasons of the uniqueness of the electrical industry.

In the mean time, as technology has progressed, end-customers perceived sensitivity to shortages has spread sufficiently as to make invalid the assumption that customers can be classified in neat classes to pay average rates. In a sense, that sensitivity is the basis for differentiating customers, and the essence for a retail market to be developed. In addition, progress has also brought us the new technology of Demand Response together with an Automated Metering Infrastructure (AMI).

DR technology can complement the mitigation of physical risk of system failure and spot price sharp increases, as a non-linear feedback mechanism to repositioned systems reserves, in time and space, much better than lumpy investments in generation, transmission, and distribution. By developing a market on customers differentiated supply security (sensitivity to shortage) requirements, an efficient rationing system can be developed. Investment on an AMI is apparently feasible just on the operational benefits to the distributor.

The architecture of a "true" deregulated model is centered on independent retail-marketers, and a new value chain, whose mission is to segment customers according to electricity value added services, which customers can select. The value chain is wholesale, retail, end customer, leaving the distributor as a pure transporter charging a toll. Retail-marketers then take control of the strategic Enterprise Solutions, developing innovative business models. As each customer selects what he perceives is the maximum value addition, the economy as a whole maximizes welfare.

This is just a glimpse of my insights, design, research and, humbled observations of the past 10 years. By no means am I saying that retail markets development will be easy. No; there is a lot of work needed to make it happen. Most investment in energy efficiency needs to look to the next 5 years, away from the Continuity scenario. I will be very happy if one place in the world decides to initiate the experiments requiresd for the development of new business models on retail marketing, and I wish to be there.

Being conservative, I agree with you if there were only the short run market problem. However, there is also a long run problem for which retailers need to coordinate in the wholesale market. This is where I understand boom bust (long run risk management) power system behavior should be managed from the demand side by retail (and wholesale) marketers. Marketing service offerings need to be designed based on what will be coming up in the future.

In addition, while most price response marketplaces have been designed with real-time, day ahead, and hour ahead markets, I strongly believe there is an important week ahead market mainly (some industries would classify also) for the low end residential market, where retailers need to participate on the wholesale market to complete week-ahead unit commitments.

However, I don’t dismiss "just not going far enough," because I am over 60 years old now, having work through design, operation, planning, management, and research of vertically integrated and (faulty) deregulated power systems, which don’t let me see very well outside of the box. For those simple reasons, Len, maybe I missing something really important, so please advise!

Regards,

José Antonio

My article is about a baseload solution using the "virtual power plant" business model or negawatts, with a brief reference to Demand Response (DR) or the "virtual peaker plant." Orion has been working on both side of the electrical equation. Currently, we have been beta testing the software and hardware for an aggregated demand response that is salable to hundreds of megawatts. Over the last two years, Orion delivered $37 million worth of documented energy savings last year while doing $23 million in sales. This year we expect to save our customers more than $50 million while doing $35 million in sales.

Consequently, I simply will not be lectured by you, Len. Now that I think about it, I still have not gotten over your final of many responses to a previous article and a previous requested to not squat on my pieces: "You lose poorly." Given the fact that you seem to want to dominate any conversation and to have the last word without ever advancing an economically coherent plan of your own, I will once again ask you to stop squatting on my articles. In the end, you just don't play fair.

Steve

P.S. Jose, you and I are on different parts of the same page. In addition, you seem to have some social skills, so I would like to talk with you privately about our shared DR interests.

And sorry that I consider your dogged repetetive articles promoting your position requires equally dogged opposition. I didn't realize a prize was available for congeniality. Thanks for letting me in on it.

Your need for the last word could not be more evident. Maybe, we should call it the "last word" tourette syndrome?

Please develop your own ideas about electricity and the free market in the form of an article or white paper for all of us to see. Then, I will answer your above-mentioned question.

Steve

Amid the sometimes abstruse energy caterwalling, Merry Christmas and Happy Holidays!!!

Our best ideas matter.

Steve

Harry Valentine

While your vision is noble (having energy efficiency rewarded and treated as a supply-side resource), it is naive. Energy efficiency policy would be most effectively pursued with better price signals. Higher peak demand prices would curtail peak demand and smooth consumption. I don't argue against energy conservation/efficiency, rather my points below are against utility incentives for same.

Historic attempts to encourage energy efficiency through incentives has redistributed wealth unfairly and encouraged free-ridership. Further, utilities and their regulators are not wiser about the prorities of companies than the companies themselves.

Energy policy should be in the form of price regulation, policy, and taxes. Energy policy should not be perverted by incentives for not consuming. Your suggestion for negawatt policies is dangerously similar to agriculture policy and we know how perverse that is. Rewarding efficiency is like me rewarding my son for not receiving a "D" in school; isn't getting an "A" its own reward? Should not a company achieving energy efficiency be its own reward?

REWARDING LAGGARDS I am not discouraging energy efficiency projects by individuals and individual companies. Nor am I discouraging energy efficiency strategy by the local, state, and federal governments and agencies. I am, however, discouraging energy efficiency policy by utilities that pay others to do what I may have already done. That is, to subsidize the laggard with the profits earned from the leaders.

WHO KNOWS BEST? Further, I've yet to find (generally) utility leaders who are more progressive in their energy policy than the (C&I) customers that they serve.

You argue that Wisconsin companies will be more competitive if energy efficiency is pursued by the utilities. Why? Wisconsin companies are pursuing energy efficiency already -- in BALANCE with the other priorities that they have. (Wisconsin companies have many worries; energy efficiency being but a small one.) They have optimized already for the current price structure. If the price structure is changed again, they'll re-optimize. A utility company (and government officials and regulators) is NOT better able to determine the priorities of the companies operating in Wisconsin.

You also argue that utilities know their customers best. I don't believe it. The companies know themselves best. Do they value the technical service from utilities? Yes. Do they value it so much that they'll pay for it? Almost never. I've tried this in other utility markets. Consultants and vendors do much better in this regard. It is easy to conclude that companies know themselves best and will pay for advise and technology when they see value. Having utilities give expertise away to their customers is another waste of utility money and a redistribution of wealth.

REDISTRIBUTION OF WEALTH? Redistributing wealth is not the social or economic role fo the utility. Why should a utility be the vehicle for collecting monies from residential and companies that ARE effciient and redistributing those dollars to those that ARE NOT effcient - or to companies that profit from the redistribution of wealth. Why should dollars from those that operate off-peak be given to those that choose to operate on-peak? Why should dollars from companies in Brookfield be given to their competitor operating in Milwaukee? I can't think of a good reason. You suggest that utility programs (obviously recovered from customers) will make Wisconsin companies more competitive. I think not. It will only raise their costs through the inefficiency of the programs. Likewise for the technical staff that reside in the utility to help customers. Their only mission is to help those that lag the pack. Why should the most progressive Wisconsin companies have higher energy costs to subsidize companies (through utility tech support and DSM programs) that are slow to learn or adapt?

PRICING It is all about pricing. No amount of programs are going to make residential customers, as a whole, more energy efficient without redistributing wealth. C&I companies make their decisions and investments based on their costs. Change costs (energy prices) and they will change their behavior.

I've analyzed, designed, implemented, forecasted, etc., many approaches to demand-side management. Almost all are -- in the final analysis -- worthless when compared to much needed changes in pricing. I'm sure you are aware of the arguments against DSM/LRM so I won't repeat them in depth. The arguments "against" are founded in solid economic theory and practice. The arguments "for" are founded in social engineering (or those that profit from it).

Kevin Booth

Steve:

California is looking at two ways of addressing this problem. The CPUC already decoupled energy sales from IOU revenues and approved rates of return ranging from 10% to about 11% for the IOUs to distribute energy.

This Spring, CPUC ALJ Meg Gottstein will be running a proceeding to develop new IOU shareholder penalty/reward mechanisms based on their EE program performance. The penalties could be a 1-3 % reduction in a given IOUs overall rate of return, enough to get the executives attention, the reward will probably be based on the avoided cost of the energy saved. The 2003 state energy action plan had language (which I got inserted) saying that an IOU should have the same opportunity to earn money helping their customers save energy as they do buying and selling it. In the 2005 version of the EAP, that language got watered down and now says that incentives should be aligned between the IOUs and their customers.

The California legislature is also considering introducing a bill next month that would ratebase the value of the IOUs incentives for installing EE measures in customers homes and businesses. Since IOU executives tend to sit around dreaming up new ways to increase their rate base all the time, this might get their attention too.

Don Wood

I believe there has been a big misunderstanding of Fred C. Schweppe proposal. Trying to clarify his proposal, lets consider four general structures for the electric business: A) a traditional vertical integrated utility; B) a faulty deregulation or re-regulation that keeps a largely irresponsive and obsolete utility business model; C) Fred C. Schweppe "Regulated Spot Price Based Energy Marketplace" with homeostatic utility controls, where the utility is the only middleman; and D) a true deregulated electricity market, with retailers innovative business models, without price controls, a new value chain (generator, retailer & customer), while re-regulating the wires monopoly.

While agreeing with Harry and Kevin on the need to do without subsidies or regulation, I urge Don specially to look at it. There is no longer a need to have retail price control regulation. The theory and practice is available to support the development of innovations in retail marketing of electricity.

-Oil companies, heating oil distributors, and gas station owners would give customers money to use less petroleum;

-Gas companies would pay customers to use less natural gas, and penalize customers for using low efficiency microturbines to make electricity;

-Manufacturers would pay customers to buy less of their products;

-Retailers would pay customers to buy fewer holiday gifts;

-Consultants would pay their clients to use less of their services.

How to do this? Very simple: change federal and state tax codes (corporate income and / or property taxes) such that taxes are lower for companies that pay people to use less of their product or service. Less product or service used means less energy used to create, deliver, or use the product or service.

What??? Are you worried about a recession or layoffs? Or Wall Street getting upset? Don't worry, I am sure that a consultant will be able to show net societal benefits from this type of efficiency policy (using "avoided costs" that show increase costs over the next 30 years).

Steve Rosenstock

The electric power industry I think is different from some of those examples. The whole electric power system is composed of the activities of generation, transmission, distribution, and customers. Customers purchase electricity to transform them in energy services. Energy services growth is what an economy needs to keep growing, no the electricity registered at the meters. Inefficient transformation of electricity to energy services by the customer is as important as inefficient transformation by generators.

In the short run demand response and energy efficiency in the long run are instruments to increase efficiency without price controls. I may be wrong, however. Please advise!

So far, I have been called dogged, repetitive, noble but naive. Oh well, I have been called worse, although I kind of like being considered naive at the age of sixty-one if only because it suggests I have not been totally over-run with cynicism.

All of this because I continue to try to discuss improving on the current systems ( or, lack thereof) regarding electricity regulation, energy policy, public benefits, tax policy and efficiencies. I realize this short and middle term thinking is not as sexy or exhilarating, but I think improving what we now do is more effective than hypothesizing about concepts not yet politically palatable or technologically possible. In addition, the positive results of such an approach are deliverable now.

Let no one misunderstand me: I believe real time metering and pricing will provide enormous opportunities for all parties, including all rate-payers, energy service vendors, utilities and regulators. In the meantime, we must treat money being spent on new sources of energy as a precious resource to be used thoughtfully and economically.

Steve

First, I think it's fine for both utilities and third parties to be allowed to provide energy efficiency and demand response services.

However, there ought to be a level playing field. Utilities should not be guaranteed a return on their investments. Instead, they should be required to recover any investments they make in the same way an unregulated firm would. Competition among a mix of unregulated suppliers and regulated utilities will ensure a continual flow of new ideas and technologies, whereas granting utilities yet another de-facto monopoly will stifle innovation and slow the pace of advances in this area.

I normally dislike subsidies, especially when they are disguised as "incentives". However, until retail customers are exposed to wholesale prices in ways that provide the market-based signals many of us advocate, modest subsidies that help focus customers on reducing consumption when prices indicate an impending short-term supply shortage are appropriate.

Wholesale market prices need to reflect all costs associated with supply. In some RTOs, most notably PJM, generators receive hundreds of millions of dollars in payments outside the formal auction mechanism to compensate them for startup, no-load, lost opportunity and other, similar costs. These need to be incorporated in generator bids rather than being paid "under the table".

Finally, I respectfully demand to have the last word on this subject :)

I suggest that since you dislike subsidies, as I also do, to eliminate alltogether price controls, leading to true deregulation of the electric market. In that sense, please take a look at the new comments I made on true deregulation to the article A Few More Unfriendly Comments on Electric Deregulation, in response to Mr. Martin-Giraldo remmarks.

José Antonio Vanderhorst-Silverio, PhD Interdependent Consultant on Electricity Grupo Millennium Hispaniola Dominican Republic

For anyone interested in other parts of the world, the European Union has put out a "Green Paper on Energy Efficiency: Doing More with Less" and a "Directive on Energy End-User Efficiency and Energy Services" You can find the Green Paper at http://europa.eu.int/comm/energy/efficiency/index_en.htm and the Directive by doing a Google search.

As hopefully one of the last words on this subject, I would like invoke an old friends saying: "It's a cinch by the inch and hard by the yard."

Steve

By way of background I have been directly involved in regulation, experiments at deregulation (some preferred to call it "restructuring" rather than deregulation), and now reregulation in the electric utility industry for 30 years. I have been an advocate of energy efficiency (both customer initiated and utility supported) for all of that time.

First, we do not have a "free market" in the electric utility industry. And we may never have one. Price signals are good, but politically difficult to implement- especially at the residential level. ( I was one of the first in my state to participate in a residential Time-of-Use rate experiment coupled with realtime load control via the internet.) Institutions such as the electric industry are slow to change and consumer habits difficult to modify- even with perfect price signals. Consumer demand is very elastic for some classes of customers and end uses and extremely inelastic for others.

Utility supported energy efficiency can be defined as utility payments to customers to use energy services more efficiently- usually through the support of the purchase of energy efficient appliances. It is not the payment of customers to use less energy. Customers in fact do not care if they use more or less energy. They just care that the energy services they seek (lighting, space conditioning, motor drives, operation of electronics) are provided reliably and at an affordable price. If the utility can provide those services with more electrons delivered to inefficient equipment or less electrons delivered to more efficient equipment they generally do not care if the price is equal. This is not analagous to a manufacturer paying consumers to buy fewer products. Because consumers do not buy electrons- they buy energy services. Utilities can provide those services unbundled by supplying the electrons to the consumer's existing end use equipment or bundled with fewer electrons and higher efficiency equipment. From an economic perspective the utility should choose the least cost option. It is not a matter of a "subsidy" or even an "incentive", but rather the best economic choice for the utility and all the utility's customers.

Beyond this view is the one of total societal costs. Even though utility supported energy efficiency makes straight economic sense for the utility and its customers it makes even more sense from the perspective of societal benefits. This is due to the fact that producing some electrons generates societal costs that are not captured in the price paid by consumers. These externality costs include costs for the health effects of pollution from fossil fuel based power plants and the subsidies for nuclear waste disposal. When such externality costs are considered then bundling the delivery of fewer electrons with utility supported energy efficiency improvements for consumers makes even more sense.

What role does the "free market" have in all this? A considerable one. Short term demand response and long term energy efficiency are goals that should be pursued. The introduction into the market of "demand responsive" appliances that react to the grid's harmonic signals during a peak demand on the local grid by automatic end use load reduction would be significant to fostering a true free market response in the delivery of energy services. (Such innovative technologies are currently being devoloped by the federal goverment in consert with the private sector- see http://gridwise.pnl.gov/) Adoption of such technologies will take time and funding. If utilities can provide support to such free market enabling technologies through energy efficiency programs that save all utility consumers money we block the road to a free market in energy services by deriding such programs as "subsidies" that should be discarded.

Researchers start pilot project testing appliances that monitor available electricity

-------------------------------------------------------------------------------- RICHLAND, Wash. (The Associated Press) - Dec 19 - By SHANNON DININNY Associated Press Writer It happens all the time. A tree falls on a major electrical line. Or a power plant unexpectedly goes off-line.

Those everyday blips in the nation's power supply can leave the power grid vulnerable to demanding consumers who expect to be able to flip a light switch at any time.

But what if your appliances could sense the stress and reduce their power usage to help stabilize the system? Imagine a dryer that turns off its heating unit for a few minutes to momentarily conserve power, while still tumbling your clothes to avoid wrinkles. Or a refrigerator smart enough to know when - and when not - to defrost the freezer.

Researchers who have been working to develop just such appliances are ready to roll out a pilot project testing their usage and consumers' reaction in a few select Northwest communities.

Free dryer, anyone?

"It's not about saving power overall, but saving power when you most need it - at times of high pressure on the power grid," said Robert Pratt, a staff scientist at the Pacific Northwest National Laboratory, a U.S. Department of Energy Laboratory operated by Battelle.

Pratt likened the technology to "shock absorbers" for the electrical grid.

"You can still keep the lights on - cheaper and better - if you build in some shocks," Pratt said. "We want to show there are no hiccups with the technology. But we're also trying to show that nobody notices if the heating element on their dryer is shut off for 5 minutes."

For several years, researchers at the lab have been developing a circuit board that, when inserted into appliances, could monitor the frequency of the power grid through the electrical outlet. Now, those researchers are testing the project by issuing free dryers to dozens of consumers with high-speed Internet access in several Northwest cities: Yakima, Shelton, Sequim and Port Angeles in Washington state, as well as Gresham, Ore. Some residents also will receive similar monitors for their water heaters.

The pilot project was made possible by $1.5 million from the Energy Department.

The idea of appliances talking to the grid and vice versa is a new dimension in the power industry that is just beginning to take off, said Steve Hauser, executive director of the GridWise Alliance, a Washington, D.C-based industry association of about 20 member companies and utilities.

In its second year, the group has been pushing for more grid-friendly technology.

"Right now, the real flexibility in meeting future demands in the power system is on better management of the demand side. Basically, we've not done a very good job of that," said Hauser, who previously worked at the laboratory.

Demand for electricity has increased about 1.7 percent each year, but the nation's utilities have boosted power supply by only about .5 percent each year, said Clark Gellings, vice president of innovation for the Electric Power Research Institute in Palo Alto, Calif., a research and development collaborative sponsored by the country's electric utilities.

Meanwhile, inflation-adjusted investment in the nation's transmission system is at its lowest point since the Depression.

"That's a formula for failure somewhere along the line," Gellings said. New technologies, such as the grid-friendly appliances, could reduce the need for some of those upgrades in both transmission and distribution, he said.

Transmission is a key concern for PacifiCorp, a Portland, Ore., utility that serves six Western states. The utility has been helping the lab find residents to participate in the project.

"Most consumers don't understand how the power grid works. They have a vague notion that it carries bulk power from somewhere else to their region and are confident that as long as it works OK, they are serviced by it," said Dave Kvamme, PacifiCorp spokesman. "In reality, the operation of the grid is very complex, and if we have one more tool in keeping the grid stable and acting more effectively, we have taken another step toward improving service."

In a second pilot project on the Olympic Peninsula, residents will be installing Internet systems that will alert them to the price and demand of power. Those who choose to delay their power usage to avoid peak demand times could earn money back from the lab.

When it comes to new power technology, Gellings said, research has shown consumers fall into one of four categories: tech-savvy, practical, apathetic and adamantly opposed to change.

The research suggests that if some signal were sent to a home to suggest energy prices were higher at a given moment, about h

Are you sugesting that the (very) simplistic Gridwise technology could generate sufficient value for the utility controlling a dryer to justify their paying the capital cost of the appliance?

Let me repeat: "Your need for the last word could not be more evident. Maybe, we should call it the "last word" tourette syndrome?"

Steve

I can't decide where you're coming from with a number of your comments. On one hand, you want more discussion of the topic of a given article, but on the other, you don't seem to want any opposing viewpoints given. You continually single Len out for wanting the last word, but every comment of his that I can remember have been questions asking for further information or clarification. By definition, that's asking to not have the last word. He's generally remained on topic, but has clearly identified an opposing view which in my opinion is the exact purpose of a comments forum. I for one, look forward to learning all sides to a given topic. While I usually tend to agree more with his, I still look forward to your counter comment and that includes the open issues in this thread. More often than not, you choose to avoid the question or take offense to his opposition, rather than cite reasons that pursuade other readers including myself to your side. I would think you would have more faith that your ideas could stand the heat in the kitchen.

[unanswered on topic comment] In addition to my curiosity of the economics of a smart dryer saving the equivalent of it's capital cost in dollars, I would like to know the answer to that same question on an energy basis. What's the going rate in Kwh these days to manufacture, sell, distribute and install one dryer and dispose of another one? Remember, you have to pay that back with just the difference between peak and non-peak electricity rates.

"For several years, researchers at the lab have been developing a circuit board that, when inserted into appliances, could monitor the frequency of the power grid through the electrical outlet. Now, those researchers are testing the project by issuing free dryers to dozens of consumers with high-speed Internet access in several Northwest cities: Yakima, Shelton, Sequim and Port Angeles in Washington state, as well as Gresham, Ore. Some residents also will receive similar monitors for their water heaters.

The pilot project was made possible by $1.5 million from the Energy Department.

The idea of appliances talking to the grid and vice versa is a new dimension in the power industry that is just beginning to take off, said Steve Hauser, executive director of the GridWise Alliance, a Washington, D.C-based industry association of about 20 member companies and utilities."

I can't help but question this. Can you justify to me that kind of money spent for a circuit to monitor frequency just like digital radios do? I'm not questioning the end goal at all here, just the inefficiency of how they are developing this plainly obvious technology that 20 companies should have spent their own R&D on. My personal clue is that they're based in D.C. where the business of the day is professional grant hunting.

Please do comment or leave it for Jack so he can have the last word because unlike him, I don't want it. ;)

A couple of issues to addres: 1) Todd - first I off - I have reviewed the comments to which reference in the above post - I believe Steve's point, although I don't mean to suggest to speak for him, is that the issues raise, frequently little or nothing to do with the article in question. To which, I have said previously, I look for to other opinions being posted in the form of articles which address the issues raised. Arguements can be expressed for more coherently and more condusively to dialouge in this format than in a discussion board.

2) In my experience discussion boards, although frequently used in this manner, were never intended to introduce new topics, but never to discuss and clarify the issue being put forward by the author.

3) To address your question in the previous post, I am not qualified to answer the balance of savings and capital cost exactly, it can be noted that the article has never called for this. The goal of the program the author suggests is to allow utilities to develop new options for improving their overall capacity portfolio through investments in demand reduction. To this end, the costs of manufacture, market and sales are borne by the manufactuer not the utility providing the incentives. The incentives are deviced designed to help end-users overcome the capital hurdles faced in every day decision-making to invest in energy efficiency.

4) Additionally, the programs being suggested are not for investment in R&D as you reference in discussion of circuit board technology. It is designed to support programs that promote the practical implementation of developed energy efficiency technology that can provide immediate savings. The discussion of the R&D issue although important to the overall issue, is tangential to the discussion here at best.

5) Furthermore, the savings are the differential between peak and non-peak energy use, but between the use of energy in the old device and the new energy efficienct device. Granted, the greatest benefit of this savings is during peak periods, the benefits of reducing demand - in terms of capacity requirements for utilities do not disappear during the off-peak period.

I look forward to your response and if you wish to develop a more detailed discussion of the issues raised here, feel free to email me at jsandersen@oriones.com.

Joel Sandersen