Utility Load Response Programs = High Peak Demand Returns for Business Customers

Electricity generation and transmission systems may not always meet peak demand requirements— the greatest amount of electricity required by all utility customers within a given region. Peak electricity use is driven by high temperatures and economic conditions. Utility forecast looks at a range of possible conditions to allow for variation in weather conditions. The forecast is based on typical peak weather conditions experienced over the past 35 years. Actual electricity demand will vary as temperatures vary from normal. If summer temperatures are unusually hot, use of air conditioners could drive demand beyond utility forecasts and available supply. In such a case, utility companies will implement what is known as “rolling blackouts,” which are intentional blackouts implemented by the utility company meant to prevent a complete shutdown of the transmission network.

To prevent this disastrous scenario, most utility companies offer commercial and industrial customers significant financial incentives to reduce their power consumption during peak demand periods. By enrolling in “load response" program, customers are paid for reducing electricity usage during peak demand times when wholesale electricity prices are highest. The incentives earned from partaking in a load response program are in addition to the avoided energy cost participants see from reducing their energy usage in the first place. Simple steps such as dimming the lights, pre-cooling during off-peak hours, daylight harvesting, and shutting down unused office equipment (using kill switches) can translate into real financial returns.

Utility companies offer several types of programs. By enrolling in a voluntary program, the customer decides if, when, and how much to reduce energy usage without risking non-compliance penalties. Businesses that have a well defined load reduction plan and ability to carry out the plan can enter into binding load reduction agreements risking non-compliance penalties and fees, but higher fixed prices.

CIC Energy Construction can assist in the development of a comprehensive load reduction plan that will yield high peak demand returns. Please contact CIC Energy Construction at (312) 224-8254 begin_of_the_skype_highlighting              (312) 224-8254      end_of_the_skype_highlighting.