The Need for Objective Program Evaluation for Long-Term Demand- Side Management Success 1
John W. Hartnett and Michael J. Kelleher
Editors' Note: In this chapter, Hartnett and Kelleher offer an enlightening overview of the position of evaluation in the policy process related to demand-side management. The background they provide explains what is at stake in the evaluation of these programs. Multiple stake- holders have competing concerns about the investment of hundreds of millions of dollars. Political and economic pressures arise on evaluators, from both outside and within the organization, to make optimistic assumptions. As a comparative example illustrates, once the work is done, the results are injected into a competitive political arena in which different actors will interpret results -- favorable or unfavorable -- to support their policy preferences. The chapter clarifies the need for objective evaluation, as well as the inter- and intraorganizational pressures that complicate the evaluator's role.
Objective evaluation of demand-side management (DSM) programs is essential for effective demand-side management planning and integrated resource planning. The analyst must focus on the true incremental costs and benefits associated with DSM for program design, resource procurement, cost recovery, and rate setting. The results of program evaluation are being used to determine the recoverable amounts of program costs, lost revenues, and, in some states, utility earnings incentives associated with the implemented DSM programs. Some util-