June 5, 2007: New Demand Response Program to Help Eliminate California Blackouts
But in a move state leaders say may well help make California's history of summer blackouts a thing of the past, the state has relaunched and restructured its demand response energy curtailment program, formerly known as the "Demand Reserves Partnership" (DRP), under the name "Capacity Bidding Program" (CBP). Beyond the name change, officials say there has been a major effort to rid the program of the inefficiencies and disincentives that plagued it in the past - and kept participation down - with one goal in mind: To leverage proven demand response strategies that have helped other cities and states keep the electricity on when the threat of a power failure loomed.
Demand response is an electricity incentive program where large energy consumers are paid to give back a small portion of their non-essential energy supply to the energy grid in an emergency by strategies such as shutting off non-critical lighting or barely used elevator banks, pre-cooling a building and switching to on-site generators.
In New York, Massachusetts, and other parts of the country, demand response programs have been credited with helping to avoid blackouts by kicking in needed supply during a power emergency, while also generating revenues totaling millions of dollars for the commercial, industrial, and residential buildings that participate.
Armed with a track record in those states, ConsumerPowerline (CPLN), a leading demand response provider, and Ancillary Services Coalition (ASC), its fully-owned subsidiary, worked with the California Public Utilities Commission (CPUC) and the regional electric utilities to restructure demand response in California. Among the changes: guidelines that now allow for higher rates, more equitable time notifications, and basic program modifications, such as how often participants can be called upon to "shed load." These changes are modeled after successful programs throughout the country like the one implemented in New York City.
With these and other reforms now in place, the Capacity Bidding Program makes its bid to make summer blackouts in the state a thing of the past.
"With our new and improved commitment to demand response, we can truly make a powerful difference in the state's ability to keep the electricity flowing," said Terry Rich, executive vice president, Ancillary Services Coalition. "Until this year, very few major companies, municipalities, hospitals, or universities truly took advantage of the revenue and environmental opportunities that demand response programs offer. But by working together and educating the marketplace, we have been able to re-craft the state's demand response program to resemble ones in the New York and New England markets. As a result, we expect, and are already seeing the seeds of a major change in the reliability of the overall California electrical grid, thanks to the teamwork and hundreds if not thousands of 'negawatts' that will now be available statewide," said Rich.
"The changes to the demand response program now in place, and the alliance forged among the demand response providers, electric utilities, and regulators, have effectively created a new energy infrastructure founded on sound marketplace incentives that will serve our citizens and our state when the heat is truly on," said Nick Planson, general manager, ConsumerPowerline. "It's very exciting to know that large energy consumers are now empowered in California to make a difference for all energy consumers, large and small," he said.
The Capacity Bidding Program offers qualified facilities guaranteed payments for agreeing to reduce load (HVAC, lighting, escalators/elevators, pumps, and manufacturing equipment) when a CBP "Emergency Event" is called. Participants make monthly bids/nominations and receive capacity payments based on the amount of electricity available for reduction each month regardless of whether or not an event is called, as well as energy payments based on their kilowatt-hour energy use reduction when an event is called. The amount of capacity reduction can be adjusted on a monthly basis.
For more information on the Capacity Bidding Program, contact Terry Rich or Nick Planson at 714-256-9146 or by e-mail at email@example.com or firstname.lastname@example.org.
Publication date: 06/04/2007