Demand Response keeps power on in the latest heat wave to hit the Northeast.

Heat waves are dangerous. They generally cover very large geographic areas. Each year, there are hundreds of heat-related illnesses and fatalities. The first sustained summer heat wave hit the Northeast just a few weeks ago as temperatures remained in the 90s for an entire week in New York, Philadelphia, and Boston. Hot summer days were also felt in Chicago, Milwaukee and Detroit. Like any hot summer day, high temperatures meant increased stress on the electricity grid. This heat wave forced New York’s power grid to break a 2006 record for peak power usage.

When temperatures rise, the demand for electricity also rises due primarily to the increased use of air conditioning to keep homes and workplaces cool. A report by the U.S. Energy Information Administration stated that “real-time electric power prices in the New York Independent System Operator (ISO) area peaked at more than $800 per megawatt hour on Wednesday, July 17 in New York City.” And according to a report by Reuters, the State of New York reached a usage of 33,955 MW on Friday.

Although this particular heat wave has abated, more are certain to follow before the summer ends. Heat waves are at their most dangerous when the power goes out. Because when people don’t have electricity to run air conditioners and fans for extended periods of time, that’s when the greatest risk of heat-related illnesses and deaths occur. At greatest risk are the elderly, children and people with heart and lung conditions.

In order to meet the increased demand for electricity, utilities have a couple options. They could build new power plants, but that takes years. Building a new power plant is also incredibly expensive; the costs of which would inevitably be passed down to their customers through higher rate increases. More power plants mean more fossil fuels being burned producing more pollution. More power plants also mean accessible fossil fuel sources being exhausted more quickly.

The other more appealing and more cost-effective choice is to simply reduce the demand for electricity.

During the heat wave, several of the electric utilities urged their customers to take practical steps to reduce their electricity use, especially between the hours of 12:00pm and 8:00pm. That’s when the demand for electricity is usually the highest. A simple reduction in energy, when undertaken by many, can help ease grid maintenance and reduce the risks to grid reliability (i.e. – reduce the risk of blackouts). A working power grid means fewer heat-related illnesses and deaths.

Demand Response

Essentially, the utilities asktheir customers to voluntarily reduce (or curtail) their electricity usage. At its core, that is what demand response is.

Easy ways to reduce your electricity usage:

• Raise air conditioning thermostats a few degrees if health permits. A suggested temperature range is between 74 and 78 degrees Fahrenheit.
• Turn off unnecessary lights and appliances.
• Turn off unnecessary office equipment.
• Turn off everything you’re not using such as TVs and computers.
• Use dimmers, timers and motion detectors on indoor and outdoor lighting.
• Close blinds, shades and draperies facing the sun to keep the sun’s heat out and help fans and air conditioners cool more efficiently.
• Shut off air conditioners when leaving home for extended periods of time.
• Defer laundry and other chores requiring electricity until the early morning or late evening hours.
• Unplug electric equipment and devices when you aren’t using them; they draw power, even if turned off.

Demand Response Pays Off

What many people and businesses aren’t aware of is the fact that they could be rewarded financial incentives just by doing the things the utilities are recommending!

Most demand response programs are currently intended for large facilities that use a lot of electricity such as large commercial buildings and institutions. These types of facilities are best suited to influence demand on an instant. But more and more curtailment service providers are looking to small and medium-sized commercial businesses and institutional customers. There are also a growing number of programs for residential customers, too. According to an article by Electric Light & Power/POWERGRID International, the annual revenue for demand response services for commercial buildings will reach $712.5 million by 2018.

Basically, when enrolled in a demand response program the facility manager gets paid to return capacity to the grid. There are other advantages, too. By reducing electricity usage during peak demand times (usually between 12:00pm and 8:00pm) facilities aren’t consuming electricity when the real-time prices are at their highest. By deferring energy-intensive tasks to times during the day when real-time prices are lowest, the cost savings can be as much as 5% to 25%. These cost savings are in addition to the revenue generated through compliance with the contracted curtailment strategy.

Don’t get left out in the cold during the next heat wave…

It’s a sure bet that the facilities enrolled in demand response programs during this recent heat wave generated a tremendous amount of revenue for themselves. They can also feel good knowing their curtailment efforts have served a crucial role in keeping the stressed power grid up and running during the heat wave.

Want to learn more about demand response? Alternative Utility Services (AUS) can answer your questions and help determine whether you qualify for one or more curtailment programs.