A “new” resource… 20 years old

Why do we ignore spillover and free drivers? The call to heed them started at least twenty years ago:

“Free drivers and spillover effects represent a new resource that, when properly measured, could affect utility and total resource results significantly.”  –Eto, Vine, Shown, Sonnenblick and Payne, 1994

What is spillover and who are free drivers, anyway? If someone partakes in conservation without utility dollars than they’re a free driver, right?  Oh wait, unless they previously participated in a utility program and were influenced by the program, then they fall into the spillover category. Or, a spillover is someone who was influenced directly or indirectly by a utility program in any way. But the methods for determining who did what, and what influenced their decision are nebulous.

“The validity of [netting out free-riders] becomes harder to support in cases where the non-participants are taking actions as a spillover effect… due to example or program advertising.”Keating and Fels, 1993

Utilities deliberately go to great lengths to convince customers it is a good idea to increase the efficiency of their homes. Mailers, bill inserts, and TV and radio advertising promote greater comfort, a cleaner environment and reduced energy bills. Customers may hear the message, upgrade their home, and believe they are doing their utility a favor by not seeking financial assistance.

In addition, utilities sometimes “lose” as much as half of their savings to freeriders – those who admit they would have upgraded on their own but (wisely) took utility incentives.  However, seldom do utilities add in savings from spillover, free drivers or other positive effects of their programs.

“We note with some irony that very little attention has been paid to free drivers and spillover. None of the programs measured the effects of spillover.” -Eto, Vine, Shown, Sonnenblick and Payne, 1994

Why are these desired load reductions as a result of positive customer behaviors largely left behind?  If we are serious about treating conservation as a the region’s first resource (as stated in the NW Power Act of 1980, section 839b(e)(1)), we need to broaden our perspectives about what we measure, and start to include spillover, free-riders and market-effects.







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