FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
C&I Customers Get Smart
Technology creates new opportunities for demand- side management
grid is going to drive additional savings. In fact, most current utility DR and EE programs targeted at C&I customers generally don’t include a tie to advanced meters. While many residential smart grid dynamic pricing pilots that have demonstrated DR impacts both with and without enabling technologies like home area networks, in-home displays, and appliance controls, fewer studies have evaluated the impacts of smart meters and dynamic prices on the C&I customer class. Those C&I pilots that have been evaluated indicate that dynamic rate structures demonstrate a smaller impact on C&I customers than on residential customers. 5
While advanced metering on its own might not generate significant DR and EE in the C&I market, smart meters that are coupled with smart building technologies can enable tremendous benefits to both utilities and C&I customers. Smart building technologies comprise a wide range of hardware ( e.g., building management systems, lighting control systems with dimmable ballasts, etc.) and software ( e.g., online tools that present real-time energy consumption data, third party software that enables DR aggregation, etc.). Leveraging smart metering and enabling smart building technologies, intelligent applications can be built to motivate C&I customers to respond to prices and system conditions, determine energy efficiency strategies, and optimize overall energy usage.
DSM in a Smart Grid Era
EE and DR are closely related yet distinctly different. EE is the sustained reduction in energy consumption (kWh) achieved either by improving the efficiency of energy-using equipment or making operational changes to allow for the same level of service to be provided with less energy usage. In contrast, DR is the temporary, replicable reduction of customer demand (kW) in response to such electric system conditions as high system load, transmission or distribution congestion, elevated power prices, or system emergencies. Generally, EE can help offset or defer the need for new baseload generation and reduce carbon emissions, while DR can help avoid the need for new peaking generation, and reduce wholesale costs for power during critical times.
There are a variety of examples where C&I smart grid technologies have been employed to benefit utilities, as well as C&I customers, through increased DR and EE. Undoubtedly, additional applications will emerge as the smart grid for C&I customers evolves.
• Short-notification, reliable demand response : C&I smart grid technologies are enabling a new class of DR resources that are increasingly providing utilities and grid operators with more flexibility in their control rooms. In the past, C&I DR was equated with interruptible tariffs; these resources were generally not considered firm and were rarely called upon. Today’s DR is providing dispatchers with an additional option to address both planned and unforeseen system needs. DR is now providing not only emergency capacity, but year-round peak-shaving resources and quick-response ancillary services.
C&I smart grid technologies have expanded the capabilities of DR resources. Now, for example, more and different types of loads can be controlled at C&I facilities. In addition, C&I smart grid technologies enable fully automated DR, which makes participation easier and less obtrusive for facility managers. As a result, utilities can dispatch the