Have you ever wondered who pays to keep the electricity grid reliable and ready to go whenever you need it? The answer is you, through a charge known as capacity, which accounts for up to 30% of your electricity supply costs. Capacity is not created equal though; how much you pay depends on how much electricity you use and when you use it compared to every other customer within the transmission network. This gives you the opportunity to make adjustments to your energy behavior and curb your capacity costs; and Alternative Utility Services (AUS) has a suite of strategies that can help your facility do just this, including demand response participation, peak load contribution (PLC) management, making energy efficiency upgrades, and installing an emergency generator.
Does your facility have lights, appliances, or machinery that are non-essential to your operations? Wouldn’t it be great to get paid for simply turning them off for a few hours? Well that is what demand response is all about. When the utility grid gets stressed, utilities are willing to pay facilities like yours to stop using electricity because it’s cheaper than turning on another generator. Some utilities will even pay you simply to be available to reduce electricity use, even if they ultimately never ask you to curtail your load. And besides getting paid cash for dropping your load, your curtailment will also be reducing your future capacity costs because demand response events usually mirror the peak load times that determine your share of capacity, which means even more money is kept in your pocket.
Alternative Utility Services (AUS) works with your facility to determine how much electrical load you will be able to reasonably curtail through an assessment of your equipment, load profile, operations schedule, and building automation systems. Once we establish a curtailment strategy, which may include anything from turning equipment down or off to pre-chilling air conditioners and freezers to turning on an emergency generator, we will help enroll your facility in a demand response program that will fit best with your capabilities and return the most value to your facility. And because we are an experienced electricity procurer, we will also work to make sure that your electricity supply contract allows you to capture and receive your capacity savings and not your third party supplier.
Peak Load Contribution (PLC) Management
How much your facility pays for capacity is largely dependent on your peak load contribution (PLC) number. PLC numbers are calculated differently by each Regional Transmission Operator (RTO), which are responsible for grid reliability. In general, the more energy you use when the grid is stressed, the higher your PLC number will be, and the higher your PLC number is, the more you will pay for capacity. So the trick to lowering your capacity costs is to lower your PLC number.
Reducing your PLC number requires an understanding of how you can reduce your consumption when the grid is stressed, plus an electricity procurement strategy that reflects this effort. And Alternative Utility Services (AUS) wants to be your ally on this quest. We work with your facility to develop both short term (i.e. demand response) and long-term (i.e. energy efficiency) load reduction strategies and then using our understanding of grid stressors and peak demands, craft an implementation plan that will reduce your PLC number. We couple this with a review of your electricity supply contract to ensure that your capacity savings will be passed through to you and not your energy supplier.
Energy Efficiency Upgrades
Completing an upgrade to more energy efficient lighting or machinery is an excellent way to reduce energy use, but you may also receive further value in a capacity reduction. This usually hidden value may drastically improve the savings or return on investment that you experience through a project, and may actually help make previously tabled projects bankable through accelerated pay back periods. Our Energy Savings: as a Service suite provides several off balance sheet solutions available to your facility.
AUS can analyze your proposed or even recently completed energy efficiency projects to determine how much a project may reduce your electricity supply costs and then help you capture that in your next electricity supply contract. Moreover though, in some markets, your project may be eligible for capacity payments, which are cash payments paid by Regional Transmission Operators for helping reduce demand on the grid. AUS can help get your project enrolled to receive these additional payments, even if your project has been operational for several years already.
The addition of an emergency generator has always been a way to ensure available back-up power, especially for critical facilities. But emergency generators can also be utilized as a capacity management asset. Rather than only turning them on when the power goes out, emergency generators can be fired up when the grid experiences stress due to high electricity demand.
Utilizing your generator in this regard will allow you to qualify for demand response programs and receive payments for your generation. Additionally, you will be reducing the amount of energy that you draw from the grid during these high demand periods, which will reduce your PLC number and capacity costs, but will also offset transmission and distribution charges from the utility.
Whether you have an existing emergency generator that needs EPA retrofitting or are looking to install a new one, AUS can help your facility take advantage of these additional revenue opportunities with no capital investment through our Emergency Generator: As a Service option. We will install and maintain your emergency generator, ensuring that it qualifies and delivers on these additional revenue opportunities. The generator is paid for through revenue sharing between AUS and your facility.