This Is Great, But …

In this press release titled “LADWP Funds Innovative Energy Efficient Technology Ideas”, the Los Angeles municipal utility announced an initiative to fund innovative energy-efficiency technologies that will particularly reduce peak-load demand. You know, if you just allow for market-based real-time pricing, even just for large industrial users, LADWP wouldn’t have to spend $750,000 on this program — innovative companies would come out of the woodwork and seize the marketing opportunities! Grrrrrr … why is demand responsiveness so culturally difficult for utilities? Why don’t they see the opportunities to earn more money by selling less power? (NOTE: I have to credit Vernon Smith for that last sentence, it’s his phrase) I am actually writing a paper in which I try to answer my own questions, so I welcome any suggestions.