62 ELECTRICALCONTRACTOR | MAR. 15 | WWW.ECMAG.COM
> FOCUS KEEPING TIME
Wi-Fi or other communications protocols and not just as a
recorder of ongoing electricity usage.
Simple metering, Kulp said, “tells you after the fact, and it’s
still not convenient.”
Such a real-time approach requires data on rates, customer
preferences and actual time of response, and utilities are only just
beginning to figure out the back-office requirements necessary
to enable these advanced pricing schemes. Schneider Electric,
like others in the exploding field of smart thermostats, offers
enterprise-level systems to help utilities understand setback tim-
ing, along with help with customer recruitment and installation.
Comverge, based in Norcross, Ga., is another leader in this
new world. It has come to the industry as a demand-response
(DR) aggregator—the company contracts with utilities to aggregate the potential load reductions of thousands of customers on
very short notice during peak periods. These short-term reductions can eliminate the need for the utility to fire up expensive
and often less-efficient peaking power plants. The company
has developed a thermostat, called Intelli TEMP, with its own
proprietary IntelliSOURCE software that operates similarly to
Schneider Electric’s device. It also offers a control device that
can be attached to a home or apartment’s second-biggest electrical load, the electric hot water heater. Like the thermostat,
it can receive pricing or DR signals to reset its temperature
settings to reduce electrical demand.
Comverge has seen notable success in a program it runs
for Pensacola, Fla.-based Gulf Power, though John Rossi, the
company’s senior vice president for corporate strategy, said
participation tops out at 12 percent of the utility’s residential
customer base. One major impediment to broader adoption, he
said, is state-level regulators who stop short of making TOU
pricing the default-rate schedule and instead set it up as an
optional offering for customers willing to try something new.
Are TOU rates DOA?
The politics of TOU rate plans has made it difficult for state
utility regulators to force top-down adoption of programs such
as default pricing schemes—for example, AARP has come out
strongly against TOU plans proposed in a number of states
that would require customers to opt out, instead of opt in, to
the planned rate schedules. Many observers see these offerings as part of the bigger evolution now occurring in utility
Today’s electricity customer might also be an electricity
supplier through rooftop photovoltaic (PV) panels, and intermittent solar and wind resources are requiring utilities to react
much more quickly to power and voltage fluctuations. In short,
what has historically been a one-way relationship is quickly
turning into a two-way street.
“What needs to change is the relationship between the util-
ity and the customer,” said Rob Thormeyer, communications
director for the National Association of Regulatory Utility Com-
missioners. “The utility has to be ready and be willing to engage
with their customers, and just learn.”
Whether it’s the rate a consumer pays for a kilowatt-hours
delivered during peak times or the compensation a utility pays
customers for a PV-generated kilowatt-hours, pricing is the
center of debates going on right now between utilities, custom-
ers and regulators across the United States. The result of those
conversations will help determine which utilities thrive and
which fail as the implications of this new two-way relationship
continue to play out.
“The threat to their survival is something they are very
concerned about,” Lazar said, noting how some utilities have
embraced customer-sited solar generation and others have
fought it, with connection charges and other fees they see as
necessary to maintain required infrastructure. “What is the
right framework for pricing? That’s the biggest issue we’re
facing across the nation.”
ROSS is a freelance writer located in Brewster, Mass. He can be
reached at email@example.com.
Load-Reduction Terms Defined
Electric utilities have, essentially, two ways to address
peak-demand situations: increase electricity supplies or
encourage customers to reduce demand. Increasingly, state-level regulators overseeing electric utility operations are
pushing utilities to focus on demand reduction as a
less-expensive option to building new generating plants.
The three demand-side options most often considered are
• ENERG Y EFFICIENC Y: One way to reduce demand is by
providing rebates for high-efficie y products, such as
LED lamps and CFLs and higher efficie y refrigerators.
However, while these efforts reduce overall demand, they
don’t specifi ally target peak-time challenges.
• DEMAND-SIDE MANAGEMENT: Customers participating in
demand-side management can receive credits or outright
payments from utilities in return for curtailing their load
at short notice during peak periods. Utilities typically
require some kind of proof of compliance, and today’s
smart meters can provide the required backup data.
• TIME-OF-USE (TOU) RATES: Commercial and industrial
customers have paid TOU rates, typically through the
implementation of a demand charge, for years. Under
these plans, electricity prices go up and down in real time,
refle ting the actual cost of the electricity to the utility.
With today’s smart meters, utilities are able offer similar
plans to residential customers. The amount might be set
as a fl t rate—so, for example, rates drop substantially
during overnight hours and go up substantially between
5 p.m.– 9 p.m. Or, they might include a critical-peak pricing
element, so notice is given on a short-term basis, perhaps
a day ahead, when a utility anticipates a particularly high-demand day. —C.R.