APS wants to control customer thermostats
(Ryan Randazzo) Would you let your electric company take control of your air-conditioner if it saved you money?
Arizona Public Service Co. will try to answer that question with a test project that will put customers’ thermostats into the utility’s hands.
The plan is one of several energy-saving strategies APS and other utilities are rolling out across the country to reduce peak energy demand, when utilities have to fire up extra power plants to supply electricity to customers.
By offering lower bills, utilities hope to entice enough customers into energy-saving programs to significantly reduce power demand.
APS is seeking ways to be more efficient during the hottest days of summer, when surges in demand from air-conditioners put the biggest strain on the power grid, stretch plants to production capacity and pose a threat of power disruptions.
If regulators approve the plan, APS will invite about 300 customers to volunteer in the air-conditioning load-control test and other pilot projects starting in fall 2010.
During hot afternoons the following summer, or when there is a problem on the power grid such as a downed transmission line, APS will be able to turn up their thermostats remotely or run their air-conditioners in 20-minute intervals, alternating with other people on the plan.
Alternating when air-conditioners run ensures that not every unit is running at once, reducing the peak demand.
Customers would be able to override the controls in case they didn’t want to participate that day.
The program will have a limited number of days APS can take control of thermostats and a restriction on how many hours per day they will do so, according to its application with the Arizona Corporation Commission.Participants in the trial will be offered free home-energy audits, but APS could offer customers $25 or so per summer for participating if the program becomes a permanent option for its 1.1 million customers, officials said.
APS also wants to test several other energy-saving tactics, such as in-home displays that would show homeowners how much power they are using and sending customers information about their power usage to cellphones.
The utility also has two new “time of use” rate plans recently approved by regulators that charge more for on-peak power and provide savings for off-peak usage.
Those plans charge as much as 49 cents per kilowatt-hour of electricity used from 3 to 6 p.m., while charging as little as 5 cents a kilowatt-hour off-peak.
The hope is that customers will respond to the price signals, saving power by turning up their thermostats and waiting to do chores like washing clothes until 8 p.m. or later.
“We do think there is going to be interest across the spectrum of offerings we have,” said Barbara Lockwood, director of smart-grid programs for APS. “We are exploring techniques that will allow customers to understand their consumption more and help manage their costs.”
Smart-grid programs use new technology to allow the utility to communicate electronically with meters and customers to reduce energy consumption.
APS and Salt River Project both import power in the summer to meet peak electricity demand, which is about double peak winter demand.
The price the utilities pay for that power on the market depends on demand across the West. They contract for most of the power ahead of time and pass the cost directly to their customers.
APS officials hope the data from the pilot project during the 2011 and 2012 summers will allow them to offer the programs to all customers.
“We also will be monitoring how our customers feel about the technology,” Lockwood said. “If their thermostat is adjusted up 2 degrees, did that really have an affect on their comfort or not?”
APS could test different changes to thermostats and other details, such as the length of time they can control thermostats.
Participants in the test program would benefit by using less electricity and having lower bills, and as an incentive, APS also would provide them with a free home-energy audit worth about $100 to find where else they can save energy and money.
APS and SRP already have time-of-use rate plans, but the APS test project is the latest move to increase their focus on energy efficiency.
Both Phoenix-area utilities also offer businesses similar “load control” programs that allow the utilities to cut power to customers and pay them cash to cut their power during certain peak-demand events.
It’s more common to target big businesses for such programs because they can shed power quickly by shutting down large pieces of equipment or even turning off alternating rows of lights.
Household “demand response” programs have been used or tested in a number of states, including Idaho, Florida, Texas and Colorado. A program in Fort Collins, Colo., pays participants $20 over five months to allow the utility to cycle their air-conditioners.
“I’ve seen studies where customers were not even aware if they were in a demand-response event or not,” said John Sterling, an APS consultant for smart-grid programs.
Environmental groups that have been asking Arizona utilities to implement stronger efficiency programs to curb the need for new power plants and transmission lines welcomed the project.
“What customers are accepting is a small amount of utility control on certain hot days in exchange for whatever the utility offers you,” said Jeff Schlegel, the Arizona representative for the Southwest Energy Efficiency Project.
“It works particularly well where it’s a balanced deal between the utility and the customer, if the customer discomfort is not too much and the credit or money seems reasonable to the customer.”
Schlegel said customers likely would object to such a plan if it were mandatory, but because giving the utility control of thermostats is voluntary, the plan shouldn’t be controversial.
“Not everyone will participate,” he said.
Last year, SWEEP won a victory when the Arizona Corporation Commission required APS to reduce 22 percent of the energy it is projected to sell by 2020 through efficiency measures, including demand-response programs.
The new project should help the utility meet that goal. APS pays for efficiency projects with a tariff that averages $1.94 a month for residential customers.
Generally, this type of surcharge, and the conservation it encourages, is less expensive for the utility and its customers than the costs of building power plants and transmission lines.
To meet peak summer demand, U.S. utilities often call on power plants that might run only 20 hours a year. The new APS programs are designed to eliminate the need to build new backup plants and pay for the fuel they burn, or buy backup power on the market.
APS believes it could sign up enough households for its air-conditioning program by 2016 to reduce peak demand by as much as 150 megawatts. That could reduce the need to run about three natural-gas-burning generators at backup plants during those hours.
“Demand response is very similar to a combustion turbine (burning natural gas),” Sterling said. “We call on it during certain hours in the summer when we need it the most.”
Even if the programs cut customers’ energy demand only 2 to 3 percent, the timing of those savings is key, said Jim Owen, a spokesman for the Edison Electric Institute, which represents shareholder-owned utilities.
“It could be the piece that allows the (electrical) system to be stable,” he said. “It can also save the utility significant money because of the price they pay for energy during those peaks.”