Demand Side Management Incentives in Canada

This paper describes Demand Side Management (DSM) incentive mechanisms that financially reward energy distribution utilities for achieving more efficiency among their customers. The paper also provides case studies for two Canadian utilities - one gas and one electric - that operate with such an incentive mechanism.The research for this paper was funded by the Office of Energy Efficiency, Natural Resources Canada, and written by Roger Peters, Senior Technical and Policy Advisor and Maya Papineau, Policy Analyst. The paper is topical because it comes at a time when Canada's Council of Energy Ministers is discussing energy supply and demand strategies, and many stakeholders are calling for stronger incentives for DSM. It is hoped that the paper will illustrate how DSM incentive mechanisms can encourage energy distribution utilities in all Canadian provinces to play a major role in making Canada's economy more efficient while at the same time meeting regional and international environmental goals.