System Optimization definition
System Optimization means the Work to be performed by the Vendor in each PCS System in accordance with the requirements of Exhibit B5 and the terms of this Contract.
System Optimization means that the utility should compare demand-side options (e.g. efficient appliance rebates) with those from the supply-side (new power plants). It means determining whether to build a power plant, or buy power from an independent producer, or whether to invest in local distributed generation or in transmission lines to import power. The utility should use all these options to assemble the suite that best meets customer energy service needs. At the end of the day, customers care about warmth, coolth, mobility, and so forth, not about kilowatt-hours. So if it is cheaper to replace an office building’s old light bulbs than to build a new gas turbine, that’s where the money should land. If it is cheaper to import wind from the Midwest than to run a coal plant, the utility should be rewarded for that choice. And so forth.