A cost-control strategy as effective as load management seems like it ought to be expensive and complicated, which may be why Electrical Distribution Superintendent Kevin Schultz sounds humble when explaining Volga, S.D., Utility's water heater load management program. "There's nothing fancy about the system. It uses off-the-shelf technology that will be familiar to any utility doing load management," he said.

Schultz's secret for getting greater load control while maintaining customer comfort and saving money and energy is a standard 30-amp relay, or rather, two relays. One unit remotely shuts down the customer's hot water heater during times of peak demand. The second relay controls the heater's bottom element separately.

"With a whole-heater system, people who use all their hot water are controlled the same as people who use a lot less," he said. "If we can shut off just the bottom element, the hot water recovers much faster. Customers who need that water really appreciate the difference. Those who don't need it, never notice."

Two relays better than one

Volga Utility set out to update its 20-year-old, mandatory load management program in 2004. "Participation had become voluntary over the years as old heaters were taken out of service," said Schultz. "Our goal was to get a handle on our peak demand costs before they got really out of hand."

Schultz went first to Comverge, the company that had originally provided the hardware for the program, to see if more advanced equipment was available. Instead, he decided that adding a second relay—just like the one Volga used to control the entire heater—would give the utility more options to manage load.

As load ramps up, Volga cycles off the bottom element. "That may be enough to control the peak," said Schultz. If not, the entire water heater can be shut down, "usually for a fairly short period of time," he said. "Once the peak subsides, we return to managing the bottom element alone. That's what allows quicker recovery for customers who have used most of their hot water reserve during the peak."

The second relay added $15 to the cost of updating the load management system and required the installer to hook up three wires instead of two. "We trained our electricians to make that modification and that was all there was to it," Schultz noted.

Software and water heater complete package

Not quite all—two more components were needed to implement the system: a software package to operate it and water heaters to control. Neither posed a problem for Volga. "Our software vendor knew about the dual relays and was able to write a program to accommodate them," said Schultz.

Volga's water heater of choice was the high-efficiency Marathon electric water heater. The Marathon installation manual shows how to hook up the third wire for a utility-mandated timer or load management box. "And, it doesn't affect the warranty," noted Schultz.

He added that most water heater manufacturers allow utilities to control the bottom element alone. "Apparently, enough utilities are using this strategy that it is becoming standard in the equipment manual," Schultz observed. "I don't know of any utilities that control both the bottom element and the whole heater, though."

Customers get on board

Volga's program gives customers a monthly incentive for participating in load control, along with a great deal on one of the most efficient hot water heaters around. Customers who want to replace an old hot water heater can get a discount on an 85-gallon Marathon fitted with dual relays from the municipal utility.

More than 80 customers, or about 12 percent of Volga's residential load, have taken advantage of the offer since September 2004. Six more customers who supplied their own water heaters also receive the monthly incentive.

Any home with a 50-gallon or larger unit is eligible, including mobile homes and apartments with individual water heaters. The digital control unit that "pings" the relay is installed on the outside of the house making it easy to check for compliance.  Schultz estimates that about 120 water heaters are still managed from DCUs installed inside the customers' homes, but those are not eligible for the monthly incentive.

Program fits city, delivers results

Dual-relay water heater management has given the utility control over 90 percent of its incidental water heater load. Schultz admitted that the system benefited from demographic factors specific to Volga. The majority of the city's residents are employed by businesses in nearby Brookings, so they are mostly on the same working schedule. "It makes it easier to predict our peaks," he said.

The same off-the-shelf technology could be applied to other loads as well. Most Volga city buildings have dual fuel with electric heat, and dual relays have been installed in some facilities to stage heating. However, the utility has no plans at this time to expand load control beyond water heaters. A simple twist on a standard load management practice has given Volga Utility an organized, effective and enforceable program that frees up enough power without penalizing customers.  No need to complicate things, after all.