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Energy Savings Maximized with Summer Incentive Programs

June 19, 2014 By Cara Olmsted

Cara Olmsted

In recent years, some electric utilities have had to institute an array of strategies including incentive programs to forcibly reduce load, including rolling brownouts, to avoid damaging disruptions. Last summer, a heat wave in the Northeast required more than 33,000 megawatts of power a day to cool New York City, a staggering number when you consider that one megawatt of electricity can power 800 homes.

This type of heavy load is extremely taxing on power grids – and especially on critical networks like the ones in New York City. During peak times, when consumption is highest, too much stress on the grid may lead to blackouts and brownouts.

Sky-high consumption presents other problems besides challenges to system reliability. If you think the number of megawatts is high, imagine the cost of keeping employees in large commercial buildings cool and comfortable, and imagine the energy savings that would come from managing that consumption more effectively.

Aside from forced reductions, however, there is a solution that helps remove some of the stress on the delivery network during peak usage times – and at the same time offering energy savings to property owners.

Around the country, a number of electric transmission system operators – often in conjunction with the local electric utility — offer demand-response incentive programs for large energy users who offer to curtail consumption during peak load alerts, when air conditioners are working overtime to keep people cool. Participating end users typically include owners of large buildings, building managers and institutions. Under such programs, property owners typically reduce 10 percent of their load during a peak load alert.

In New York City, there has never been a better time to sign up for incentive programs, because reimbursements are soaring to never-before-seen levels. In 2014, Con Edison – the regulated utility — boosted its proposed incentive levels to the point where users will receive 60 percent or more above what was paid for similar demand response curtailments at the same time last year.

For example, in 2013, a 1.4 million-square-foot property enrolled in the Con Edison curtailment program which earned the maximum incentive would have seen a return of approximately $178,000 for reducing its load during “peak load” alerts. This year (2014), that same owner making the same load reduction would be paid about $300,000 – an eye-opening increase over the prior year.

So, how does it work? During the hottest days of summer when demand is at its highest levels and the load becomes critical, a “peak load” alert is issued by the New York Independent System Operator (NYISO). NYISO is a not-for-profit corporation responsible for operating New York’s statewide electricity grid and maintaining its reliability.

Program participants may also receive notifications when extraordinary demand is occurring within a local utility distribution system.

Property owners and managers do not need to spend time repeatedly asking individual tenants to physically turn off lights or raise air-conditioner temperatures to achieve the targeted level of load reduction. Instead, more-sophisticated energy services companies are making it easier than ever to participate in these incentive programs by automating the process. These firms work with their clients to identify opportunities for load reductions — and then create a customized, software-driven protocol that pinpoints the equipment modifications necessary to make the appropriate reductions. The automated system activates the energy-saving measures, reducing the building’s consumption and earning the incentive payment.

Large owners must remain mindful of the need to maintain proper comfort levels for tenants. To the greatest extent possible, demand response reductions make the kind of changes that building occupants will not notice. A qualified, energy services provider will work with the end user to create a demand curtailment protocol that minimizes the potential for discomfort. At the point of implementation, these modifications can be synchronized to the building management system to allow for a quick response and minimal involvement of on-site building staff.

If every major user who is eligible for these incentive programs were to sign up and reduce their demand during peak load alerts, power disruptions would be less of an issue for everyone who lives and works in major metropolitan areas. Broad participation would help ensure system reliability.

But the incentives can also deliver valuable financial benefits. By strategically managing their electricity usage to support the grid’s need to balance supply and demand, end-users can access a lucrative new revenue stream and reap significant energy savings.

Smart property owners are now in an excellent position to essentially earn back a portion of their operating budget. At least in New York City, the deadline is fast approaching to sign up for these summertime incentive programs. But no matter what part of the country you are in, it makes sense to look into these incentive programs and find ways to take advantage of them.

Cara Olmsted is Director of New Business Development for ConEdison Solutions in Valhalla, NY. ConEdison Solutions is a leading energy services company that provides competitive power supply, renewable energy, sustainability services, cost-effective energy efficiency solutions, and performance contracting services for commercial, industrial, residential and government customers, including universities, public school districts, and hospitals nationwide.  Offering innovative products, financial stability, and a commitment to customer service, the company is based in Valhalla, New York, with offices in Burlington, Massachusetts; Cherry Hill, New Jersey; Chicago, Illinois; Falls Church, Virginia; Houston, Texas; Tampa, Florida; and Overland Park, Kansas.  The firm’s dedicated team of energy professionals delivers a broad range of energy solutions.  ConEdison Solutions offers programs and services designed to help customers achieve their individual energy objectives and is accredited as an Energy Services Provider (ESP) by the National Association of Energy Service Companies (NAESCO).

ConEdison Solutions is a subsidiary and registered trademark of Consolidated Edison, Inc. (NYSE: ED).  More information can be obtained by calling 1-888-210-8899 or visiting the ConEdison Solutions website at www.conedsolutions.com.  You can also visit the Consolidated Edison, Inc. website at http://investor.conedison.com for information on all of the Consolidated Edison companies.



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