In this issue
		Energy Services Bulletin home page
		California takes notice of Redding's outreach and efficiency programs
		Load management offers utilities customized control
		Western to create online IRP reporting system
		Technology Spotlight: Reflective and low-e products: where they help, where they don’t and why
		Energy shorts
		Calendar of events

Load management offers utilities customized control

Warren Neal of Loveland Water and Power installs a cycling device on a customer's air conditioner. Customers are volunteering for the cycling program to help the utility manage its summer peak. (Photo by Loveland Water and Power)

At a recent demand-side management workshop Western held on the plains, many utilities expressed an interest in conquering peaks—or peak demand, at least.

Programs that reduce or shift demand from on-peak to off-peak times may be more complicated to implement than conservation programs, which reduce total electricity use. However, such load-management, or demand-side management programs have the potential to lower overall electricity costs, since utilities pay for demand as well as electricity. Load management may also reduce environmental pollution because of the need for fewer peak generators.

A typical demand response program involves customers voluntarily installing relays on appliances or systems so the utility can remotely turn off the units for short periods during peak demand. Many utilities encourage load management by offering customers a choice of service options with price incentives.

Missouri River Energy Services, which hosted the DSM workshop at its Sioux Falls, S.D., headquarters, is working with its members to develop both energy-efficiency programs and demand-response strategies. "The appeal of load management is that each utility can customize the system for its own situation and load profile, and get results on a large scale," said MRES Energy Services Supervisor Joni Livingston.

Targeting heating in a cold climate

Valley City, N.D., Electric, for example, launched a load management program in 1980 that focused on dual-fuel heating systems, as well as interruptible loads like water heaters. This is a common measure for winter-peaking utilities, according to Valley City Energy Management Specialist Wayne Nelson. "You can control dual-fuel heating for longer than you can water heaters because the alternate furnace provides the heat while the electric heat is off and eliminates load rebound when the electric heat is turned back on," he said. "It's actually a load-shedding strategy."

The program was Valley City's answer to purchasing expensive supplemental power from a newly-built, coal-fired plant. "The plant had to be paid for and that power cost more than Federal hydropower," Nelson recalled. "Since our peak determined how much supplemental power we had to buy, we set out to get the peak down." 

Valley City did limited marketing for the program because the utility was not sure how long it could offer it. "We only planned to go with load management as long as it made economic sense," said Nelson. "The factors that made it viable—rate differential, cost of fuel, the economy in general—changed a lot through the '80s and '90s. Some utilities actually turned off their load management systems."

However, the off-peak rate participants received was a good customer relationship builder even when the utility's savings became smaller. The program continued to grow through word of mouth, said Nelson, "But we never reached the point where the rate discounts exceeded the power cost savings. And the cost of supplemental power might level off for a while, but over time it keeps going up," he pointed out.

Today, after nearly 30 years of manipulating its load to reduce the peak, Valley City boasts a very high load factor, the ratio of the average load to peak load during a specific time. Although continuing to reduce the peak now requires more manipulation—"We have to control the load longer to maximize the peak reduction," Nelson observed—he continues to be a proponent of load management. "High demand charges are causing utilities to take another look at demand response," he noted. "Valley City's history shows what an effective tool it can be for controlling costs." 

New program for a new summer peak

Loveland, Colo., Water and Power hopes that demand response can help the municipal utility get control of a summer peak that has grown 135 percent over the last decade. Partnering With Power, Loveland's first load management effort, is a basic air conditioner cycling program and participation is strictly voluntary and free. "We wanted to give customers the chance to learn about what is going on with their utility and empower them to address energy concerns," said Utility Conservation Coordinator Mary Wyatt.

Like Valley City, Loveland's concern is the high cost of peak power purchases. Getting its air conditioning load under control will help keep electricity rates stable. To meet the city's load management goal, Wyatt estimates that about 3,000 residents will have to sign up for the program. Before expanding the program to commercial customers, Loveland plans to test the cycling device in a public setting in its city buildings. 

So far, customers are responding well to the twin incentives of community spirit and long-term economic benefit, communicated through a savvy marketing plan. In the first few months, 300 customers have signed up to have an adaptive algorithm cycling device installed on their air conditioners. "I am very impressed at how well our customers grasp the concepts of peak power and their role in reducing it," said Wyatt.

Word of mouth best marketing tool

The program targets residential customers whose summer consumption is 75 percent more than in winter—about 7,000 of Loveland's 26,000 residential meters. Those customers received a letter from the utility explaining how the load management program worked. The letter was important as an introduction, Wyatt said. "It gave us something to talk about when we met with people. Some customers even signed up just from the letter."

The week after sending out the letter, Loveland employees—"In head-to-toe Water and Power garb," Wyatt noted—went door to door. "If the customer was home, we talked about the program," she said. "If not, we left a note, brochure and a fact sheet on peak power."

A press release and a story in the city newsletter about the program also got good response, but the personal approach seemed to work the best. "And now, people are hearing about the program from neighbors and calling us to sign up," Wyatt said, echoing Valley City's experience. 

Flexibility encourages participation

The most common question homeowners asked was if cycling their air conditioners would save them money. The short answer is "not much," since Loveland expects to activate the device only about 20 times during the summer cooling season on weekday hours between 2 and 7 p.m. There will be no cycling on weekends or holidays. 

Customers can opt out of the voluntary program at any time, though the utility asks first if it can reduce the extent of cycling. Also, if customers are having an event where they will need additional cooling, like a party with lots of guests, they can request to be taken off cycling for a day. "We wanted to give participants as much flexibility as possible, since they are volunteering to help us out," Wyatt commented.

At the end of the summer, participants will receive a report from the utility telling them how much the cycling saved. "When people get involved in a project to make a difference, it's important that they see the results," Wyatt acknowledged.

Do research before launching program

Results are what matters in any DSM program, and load management does not always result in reduced demand, said Western Energy Services Manager Ron Horstman. "Especially when renewables and distributed generation are part of the mix, it is a good idea to do a rate study before implementing a load management program," he advised.

"Load management is just one DSM tool," Joni Livingston agreed. "At MRES, we urge our members to look at all the options and choose the measures that best fit their individual situations."

A growing number of utilities are taking that advice and looking closely at what load management might do for them. Under the right circumstances, it may be just the tool they need for scaling peaks—and cutting them down to size.