By: Greg Mullis, Tri-County EMC

demand side mgmt

Since the 1950s, electric cooperatives have been actively working to influence load shape. As co-ops tried to grow out of the infancy of rural electrification, programs such as the Gold Medallion “total electric home” added kilowatt-hour sales to circuits with barely enough initial load for approval and construction. Utilities fought to convert home heating from wood or gas to electricity. The availability of residential air-conditioning dramatically increased electric loads.

By the 1970s, the energy crisis changed how utilities approached power supply. The notion of conservation was born, and with it, many cooperatives began responding to new rate pressure by introducing demand side management programs.

Demand side management, simply defined, is the reduction of customer demand for energy by changing usage patterns. This change can be implemented indirectly, through energy efficiency, education methods, or time-of-use rate signals, or directly through direct load control. For the latter, utilities use various technologies to reduce peak demand because of exposure to periods of higher wholesale prices or low energy supply reserves. Demand management does not typically reduce energy consumption, but rather it changes the timing of when energy is used. But with a cooperative’s peak demand often affecting future wholesale rates for several years, the return on investment can be significant.

The bread and butter of load management programs have been direct load control of air-conditioning and water heating. Not surprisingly, these loads make up a large percentage of residential load. And on hot summer afternoons, radio signals rotate the operation of central air-conditioning and defer water heater run times until later in the day, after peak electric demand has passed. As meter technology has evolved, so has load management technology, with many utilities using the same radio frequency or powerline carrier technology to communicate with load management switches.

The promise of lower future power costs motivates members to participate in load management programs. While “making a difference” motivates some members to participate, altruism is enhanced with rebates and bill credits—for some co-ops as much as $35 per year per switch. Regardless of the motivation, the member engagement brought by member participation is important. “By giving members an opportunity to take control of their future costs and earn a rebate, members feel empowered,” commented Kim Broun, communication specialist for Tri-County EMC.

While load management switches can be effective, they are not without risk. Air-conditioner switches are an easy target for removal by HVAC contractors who often do not understand the purpose for the program and have no incentive to protect the expensive investment made by the cooperative. Many cooperatives have implemented load control programs using programmable thermostats such as Google’s Nest. United Cooperative Services, a Texas cooperative, is offering rebates and monthly credits to members who install Nest Learning thermostats and participate in the Texas cooperative’s “Rush Hour Rewards” program.

Because most cooperatives are heavily residential, focusing on homes for load control is logical. But many co-ops are finding success with reducing peak loads through commercial demand side management. Coupling distributed generation with interruptible rates for irrigation, poultry houses, and other commercial and industrial loads can cut large chunks of capacity. Many cooperatives are also employing conservation voltage reduction in their demand side management efforts.

With any cooperative program, measuring performance is key. With remotely located equipment and residential loads that can fluctuate dramatically as weather changes, it has been historically difficult to gauge the effectiveness of load management switch programs. For many cooperatives, big drops in natural gas prices are totally changing the dynamics of the economic model used to substantiate the program. In just two or three years, the price per therm of natural gas— the fuel for the combustion turbine peaking plants addressing much of co-op nation’s peak demand—has dropped by 75 percent. That change has many cooperatives reexamining the direction of their load management efforts.

As metering systems and meter data management become more robust, the ability of cooperatives to capture and analyze system data will allow for better measurement and verification of load management efforts. The connection of more and more appliances to the internet will continue to offer opportunities to send price signals and influence customer behavior. Load management is evolving, but it is certainly not leaving. The same factors that motivated cooperatives to begin shaping loads over 60 years ago are alive and driving load management programs in our future.