Demand-side management (DSM) is a proven tool used by utilities across North America to cut energy costs, improve grid reliability, and grow high-quality local jobs. Alberta is missing out as one of the only North American jurisdictions without DSM. Without supportive policy and regulation, Alberta can’t access the many benefits DSM provides to households, building owners, utilities and the broader economy.
A new Pembina Institute report, Beyond the Meter: Harnessing demand-side management to power Alberta's energy future, produced in partnership with the Alberta Ecotrust Retrofit Accelerator program, shows how DSM reduces energy costs, lowers peak demand, and strengthens local economies while delivering lasting social and economic benefits.
What is demand-side management?
Demand-side management (DSM) is the name for a variety of strategies to manage how and when electricity is used, saving money for utilities and their customers. DSM programs encourage customers to reduce total energy use or to shift the time of day they use energy. These programs work because they provide a direct financial benefit to the customer for upgrading equipment or changing behavior. There are three approaches that fall under the umbrella of DSM: energy efficiency (EE), demand response (DR), and distributed energy resources (DERs).
DSM investments across jurisdictions
- Canada: $1.59B invested in DSM in 2023
- Ontario: $10.9B over 12 years
- Québec: $10B over 10 years
- Nova Scotia: $173M over 3 years
Proven results from retrofit-aligned DSM programs
Across Ontario, Nova Scotia and New York, DSM programs consistently delivered:
- Lower costs for households and building owners, with high returns on investment (up to $3 in utility bill savings per $1 invested).
- Measurable grid benefits, including reduced peak demand and system-wide energy savings.
- Job creation and economic growth, providing stable employment across construction, manufacturing and trade ally industries.
- Market stability for retrofit projects, with programs structured to support both prescriptive and comprehensive retrofits.
These outcomes show how DSM functions as both an affordability tool and a market enabler — lessons directly applicable to Alberta’s economy.
DSM programs reflect the triple bottom-line value of energy efficiency:
- Direct savings and comfort improvements for participants.
- Efficiency and reliability benefits for the electricity system.
- Societal gains such as reduced emissions, improved public health and long-term economic growth.
A practical entry point for Alberta
Retrofit-aligned DSM programs provide Alberta with a practical entry point. By backing accessible building upgrades today and creating pathways for deeper retrofits tomorrow, utilities can help consumers manage costs, ease pressure on the grid, and give contractors the confidence to hire and train for steady demand.
Stable, year-over-year investment would transform retrofits from sporadic projects into a reliable market that supports long-term workforce development. For contractors, building owners and retrofit service providers, DSM offers the stability and predictability the sector has long lacked. A steady pipeline of projects allows companies to hire, train and retain skilled workers — reducing boom-bust cycles and enabling businesses to scale services, invest in new technologies and build long-term client relationships.
DSM is affordable and high-impact
Alberta would save over $1 billion annually through avoided energy costs and deferred infrastructure. If DSM was implemented in Alberta, programs are projected to deliver a total resource cost-benefit ratio of 2.3 between 2019 and 2038, generating an estimated $11.1 billion in net economic benefits.
Between 2021 and 2023, Ontario’s IESO Retrofit Program achieved total energy savings of 1,203,000 MWh and reduced peak electricity demand by 180.1 MW. For every $1 invested, the program generated up to $3.66 in utility system benefits, demonstrating a strong return on investment for ratepayers.
Recommendations at-a-glance
1. Policy direction: Unlock DSM as a resource tool
2. Regulatory framework: Reward utilities beyond infrastructure
3. Retrofit-aligned DSM: Drive energy savings and market stability
The Pembina Institute acknowledges the generous support of the Alberta Ecotrust Foundation.
