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Appendix A Statement of Work The subcontract between Los Alamos National Laboratory and the National Academy of Sciences provides that the Academy will form a committee of experts to assess the role of electricity in domestic economic growth. The stated objectives of the study are as follows: 1. Review relevant research on the interrelationship between electricity and economic growth in the United States. Indicate the degree to which electricity was historically important to U.S. economic growth and document the results. 2. Analyze changes taking place in the structure of the economy that could influence future trends of electricity demand growth, and identify possible relationships between economic growth and electricity requirements that may develop in the future. 3. Review the electricity consumption patterns that have experienced signif iciest changes over the past decade, and indicate potential new electr icity patterns. 4 . Present the results of the study in a written report. The report will (a) review the importance and interrelationships between electricity and economic growth, (b) show how trends in electricity demand growth may be impacted by changes in the economy and what the particular relationships are that affect these trends, and (c) form a foundation for subsequent examination of electr if ication and productivity in particular industries and for examination of alternative demand and supply scenarios for electr ic ity. The sponsor also asked the committee to consider several auxiliary questions, intended to give additional structure and specificity to the general task. The questions, listed below, relate principally to two issues: electricity demand and productivity stemming f rom electricity use. 1. What is the relationship between electricity use and GNP? Is our measure of electricity use appropriate? 133
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134 2. Has the basic demand function for electricity remained stable in recent history? What is the form of alternative demand functions and how do they interrelate? 3. What are likely to be the major determinants of electricity use over the next two or three decades? Do present methods of forecasting use adequately take these determinants into account? As measures of use, must peak load trends ~ in kilowatts) be treated differently than consumption trends (in kilowatt hours) ? 4 . Will structural changes in the economy, apart f rom ut ility efforts, affect future demand for electricity? If so, how? How is "structural change" def ined for the purposes of this question? 5. How have the conditions of historical electricity supply influenced economic growth? 6. What are the implications of the conditions of future electricity supply for economic growth? 7 . Does electricity supply af feet our economic well-being beyond its measurable affect on GNP? If so, how?