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Case study: Targeting demand‐side management for electricity transmission and distribution benefits
Author(s) -
Orans Ren,
Woo ChiKeung,
Horii Brian K.
Publication year - 1994
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090150209
Subject(s) - investment (military) , plan (archaeology) , demand side , electricity , business , electricity demand , service (business) , transmission (telecommunications) , distribution (mathematics) , operations management , peak demand , industrial organization , environmental economics , operations research , economics , microeconomics , computer science , telecommunications , engineering , marketing , electricity generation , electrical engineering , geography , mathematics , law , mathematical analysis , archaeology , power (physics) , quantum mechanics , political science , physics , politics
This paper shows how a vertically integrated utility develops a least‐cost transmission and distribution (T&D) plan that considers demand‐side management (DSM) to defer capacity expansion necessary for serving growing demand. The plan is the result of applying dynamic optimization techniques to a T&D planning area in the service territory of Pacific Gas and Electric Company (PG&E), the largest privately owned utility in the USA. In the case study area alone, DSM enables PG&E to reduce the present value of its planned investment in local T&D from $112.3 million to $77.3 million over a 20‐year period.