While dimmable lighting ballasts and intelligent refrigerators encourage conservation through increased access to demand response opportunities, there are simpler and cheaper things we can all buy to reduce energy costs and greenhouse gas emissions: stop buying energy hogs. But when is the last time you compared the energy consumption of two coffee machines, stereos, or refrigerators?

I considered this question as I recently stumbled across what I believe is a new feature on the technology website CNET - their product reviews now include statistics on energy consumption. Perhaps this is a result of the increased awareness of electricity-gobbling TVs or general consumer consciousness about climate change, but regardless of the reason(s), it’s good news.

Take a look at this Gateway computer review, posted a few days ago:

“We use a lengthened version of our multimedia multitasking (MMT) benchmark to judge a PC’s power consumption under load, and while it’s not designed to overwhelm a quad-core CPU like the one in the Gateway, the Gateway’s efficiency is no less impressive. Consider that the Gateway outperformed every other system in this category on the MMT benchmark by a large margin, but that it also used the second lowest amount of power on that same test. If you were to consistently run programs on this Gateway that ran on all four processing cores, its annual power consumption cost would likely increase, but for mainstream tasks, the more common work scenario for a PC in this price range, the Gateway demonstrates commendable efficiency.”

CNET has a slightly different test for TVs that illustrates consumption in different picture settings, similar to the computer’s test at different levels of usage:

What’s particularly valuable about the CNET reviews is that they put energy consumption in real terms. Consumers think in dollars, not watts or kilowatt-hours. Even if the assumptions in the CNET calculations differ from how you’d use a device, presenting the data in the units that they do ultimately makes the information more tangible, and I’d presume, more likely to impact a purchasing decision.

Overall, Hohm is detailed! The application asks not only about square footage but also about the R-rating of insulation, square footage of windows (and type), direction your home faces, types of appliances, etc. I’ve answered a plethora of questions and am still only about halfway done.

Hohm offers typical suggestions on how to save energy, but they come with a good amount of detail as well, such as the estimated cost of a DIY or professional installation, and the amount of $ and carbon you’d save annually if you made the change.

While I just started using Hohm, so far, I’m pretty impressed.

Sign up here (you’ll need to create a Live account if you don’t already have one): [Microsoft Hohm]

This demonstration should silence some the Better Place skeptics who argued that battery swapping was simply not possible. Yet, there are still automakers that doubt other technical aspects of battery-swapping, even if the stations can be built. Moreover, many of the Better Place critics challenge the fundamental concept of battery-swapping itself.  Some argue that the technological hurdles that the model seeks to address will be overcome in the near future (e.g. quick-charging and high-voltage infrastructure). Others are of the mind that swapping stations may be an expensive band aid for a broken bone, even if the aforementioned advances don’t occur for some time. While Better Place claims that they’ll roll out their entire infrastructure all across Israel for less than it costs the country to import oil for a two months, it is still hundreds of millions of dollars - their plan to wire the Bay Area is set to cost a staggering $1 Billion! If swapping is the interim solution until quick-charge batteries come to the market, does it make sense to invest millions (or billions) in infrastructure rather than battery R&D?

Those are larger questions than this post will tackle. Instead, I’d like to raise an issue that’s top of my mind due to its central place in smart grid discussions - interoperability.

Discussions about standards for plug connectors are well-underway. Charging companies like Coulomb, and vehicle manufacturers like GM, recognize that this is an issue that must be sorted out before the widespread adoption of electric vehicles can take place. Imagine the complexities that would exist if Mobil, Gulf, and Citgo stations all had different shaped nozzles at their fuel pumps.

For the moment, however, Better Place appears to be the only company focused on creating a battery swapping infrastructure, so the same pressure for standards doesn’t seem to exist.  But while external pressure for standards may not be as great, ignoring the issue of interoperability would be a mistake for Better Place. Even if there isn’t a lot of discussion on the topic, it must be on Better Place’s radar - such standards are likely key to the adoption of their model. In fact, Better Place needs their standards to be adopted by a slew of companies to achieve their vision - switching stations won’t be ubiquitous if they only work with a minority of electric vehicles. Even if Better Place was willing to deploy infrastructure for those vehicles alone, a closed system that worked only with the vehicle manufacturers Better Place had partnered with (today only Renault/Nissan) would slow adoption by consumers who may feel too locked-in to one service provider. That consumer sentiment would likely be noticed by other firms in the space who would seek to meet consumer demands for a more flexible system, creating a standards war.  Moreover, I have to imagine the governments they’re working with don’t want to find themselves in a situation where one company owns and is responsible for all the EV-related infrastructure.

Fortunately, Better Place seems to be focused on the issue. While the “Standards” page on the Better Place website deals mostly with charging and battery standards, it ends with the following sentence: “We are also driving performance standards for switch technology to insure [sic] that drivers get the same quality of service regardless of where they go or which service provider they select.” This is certainly good news for consumers, especially if Better Place succeeds. Format wars are painful enough when they involve the living room, but they’re much worse when they involve infrastructure.

It turns out, it’s not the only part of the proposed legislation that merges aspects from two policy ideas. The National Journal has a very well-written piece that examines how some of the details of the carbon legislation floating around the Hill actually take the best aspects of the cap and trade and carbon tax ideas. Here’s an excerpt:

The notion of keeping the tax constant and letting quantities vary also fits with the idea that additional carbon emissions have a known environmental cost. In principle, if you set the tax rate equal to that cost, the market can be left to decide what the correct ceiling on emissions should be. Most environmental scientists, however, would prefer to set a ceiling for the sake of extra certainty in achieving cuts of a particular size. The case for this is stronger if the damage caused by carbon emissions has so-called threshold effects — that is, if the damage rises discontinuously once a certain line is crossed, which is a distinct possibility. You set a ceiling to ensure that the threshold is not crossed.

The trouble is, using that approach, the implicit carbon tax may then fluctuate so much that it disrupts the economy and makes energy planning for the future more difficult. Moreover, the logic of threshold effects is a little dubious when you are setting limits for the U.S. economy in isolation. Global carbon emissions, not national carbon emissions, drive global warming. The United States can set a quantitative ceiling for its own emissions, but even if it complies with that target, emissions elsewhere will decide whether a critical global threshold is crossed.

The draft bill actually envisages a compromise between the two approaches. It would create a “strategic reserve” of extra permits that could be allocated to prevent “unexpected allowance-price fluctuations.” If this reserve were of sufficient size, and if it were used to hold the prices of permits steady at a specific amount — say, $20 per ton of carbon — then the result would be akin to an outright carbon tax set at that rate. If the architects of cap-and-trade have something along these lines in mind, the case for cap-and-trade over an explicit carbon tax collapses, and vice versa: The two become one.

If cap-and-trade were administered this way, the only remaining differences would be whether you use the word “tax,” and how much cover you give to Congress in creating and disbursing pork.

[National Journal]

Episode 1, “An Aged Electric Grid Looks to a Brighter Future,” looks at the reliability challenges facing the grid in the near future and how advanced metering and the smart grid applications that sit on top of this new infrastructure will help avoid blackouts, deploy renewables, and further energy efficiency.

[Gridpoint storage unit in an Xcel Colorado customer's home]

Episode 2, “A Green Challenge: Make Renewables Reliable,” examines the role storage may play in facilitating the integration of renewable resources, like wind farms. American Electric Power’s wind storage project, Beacon Power’s “flywheel” storage technology, and Gridpoint’s software platform are all profiled.

[Illustration of Beacon Power's Flywheel technology]

Episode 4, “Smart Meter Saves Big Bucks for Pennsylvania Family,” puts a real-life face on something that studies have repeatedly shown - visibility into energy consumption leads to increased efficiency. PA-resident Tammy Yeakel discusses how she can’t get enough of her utility’s website that marries near-real time energy data with tips on how to save: “For Christmas, we got one of those nice digital pictures. And everyone says ‘Why don’t you leave it on?’ Cause it’s an energy sucker, right? I learned that on the Web site.”

[Tammy Yeakel looking at her meter data through PPL's website]

Episode 6, “The Grid May Be Smart, But Will It Also Be Green?” discusses how meters themselves are only one part of the smart grid and that the “applications” that sit on top of this new infrastructure play an equally important role in achieving the desired results. For example, smart meters allow for more time-of-use rates, but these rates typically encourage consumption at “off-peak” times, which in some regions that can mean increased reliance on dirty coal power plants.

[Wind turbines near Wilson, Kansas]

Well, SBSP has been getting a lot of attention this week after California utility Pacific Gas & Electric requested regulatory permission to enter an agreement with Solaren to deploy a SBSP solution.  The project, if approved, would set out to beam 200 MW of solar power to earth from space.

So why look to space? Not only does the sun shine 24×7, it shines at a much stronger intensity (or insolation) - if it could be captured and transmitted back to earth, we’d have more energy than we could use. A 2007 Pentagon report that examined the topic put it this way:

“A single kilometer‐wide band of geosynchronous earth orbit experiences enough solar flux in one year (approximately 212 terawatt‐years) to nearly equal the amount of energy contained within all known recoverable conventional oil reserves on Earth today (approximately 250 TW‐yrs). The enormous potential of this resource demands an examination of mankind’s ability to successfully capture and utilize this energy within the context of today’s technology, economic, and policy realities, as well as the expected environment within the next 25 years. Study of space‐based solar power (SBSP) indicates that there is enormous potential for energy security, economic development, advancement of general space faring, improved environmental stewardship, and overall national security for those nations who construct and possess such a capability.”

But is SBSP feasible?

Like all emerging technologies, the main question is, what does it cost? Simply, A LOT. The aforementioned Pentagon report concluded, as noted in the WSJ, that a $10 billion would be needed to have a 10 MW pilot satellite in orbit by 2016. That’s a cost of $1 million per kW! That’s about 140 times the cost per kW of the next most expensive carbon-free technology, nuclear. Even launching such satellites would be a challenge. The aforementioned Pentagon report also stated that “existing launch infrastructure cannot close the business case.”

Even if the costs could be reduced and the launch infrastructure improved, the power would still need to be transferred back to earth, wirelessly. And while Mankins set a new record, beaming power wirelessly 92 miles between Hawaiian islands, no one has tried to wirelessly transmit power in large amounts or over thousands of miles. Solaren, however, appears to be confident in their approach. In an interview on PG&E’s blog, Solaren CEO Gary Spirnak said, “While a system of this scale and exact configuration has not been built, the underlying technology is very mature and is based on communications satellite technology. For over 45 years, satellites have collected solar energy in earth orbit via solar cells, and converted it to radio frequency (RF) energy for transmissions to earth receive stations. This is the same energy conversion process Solaren uses for its SSP plant.”

While PG&E will likely be criticized for examining such a costly solution, I think the utility should actually be lauded to looking for long-term, game-changing approaches to our energy challenge. The case can certainly be made that such a disruptive technology should be developed through an Apollo-like program, but the government isn’t launching one. Perhaps that’s why the private-sector, though startups like Solaren and Space Energy (and the VCs that back them), are taking the challenge on themselves.

This reality leads to a challenging situation  - utilities, and the regulators that oversee them, are supposed to procure the most cost-effective power for their customers - and SBSP likely doesn’t meet that test.

Last week, the House Committee on Energy and Commerce released a discussion draft of the American Clean Energy and Security Act of 2009. The bill, sponsored by Representatives Waxman and Markey, represents a substantial step forward for those eager to see the development of a clean technology economy here in the US. From a clean energy standpoint alone the proposed legislation calls for a package that includes a federal RPS (requiring 6% renewable power by 2012 and 25% by 2025), carbon capture and sequestration, clean fuels and vehicles, and smart grid and electricity transmission deployment. But the bill (nice summary found here) is about more than just clean energy, as it includes title provisions on energy efficiency, global warming pollution, and economic transition. In short, the bill contemplates not only our fuel sources, but the manner in which we deliver and consume fuel, how we manage the associated greenhouse gas emissions, and the necessary economic and trade steps to ensure a successful transition.

Applauded by the President of Environmental Defense, the bill has generally drawn support from environmental groups, with the President of NRDC calling it a ‘bold step‘. Whether the bill will pass both houses of Congress is an interesting question that centers, in part, on its impact on electricity prices. Because the bill includes both renewable energy and cap and trade measures, its substantial near-term costs are likely to be paid by the electric power industry, and ultimately passed through to rate-payers in the form of higher electricity prices. In simple terms this makes sense- the market price of a kWh today ignores the costs associated with environmental externalities such as GHG emissions, and therefore is too low. Properly capturing these costs, or shifting toward clean technologies, will increase prices over the foreseeable future. However, the voting public’s attitude on environmental protection appears to be changing. When asked about the tradeoff between economic growth and environmental protection, a recent Gallup poll suggests that, for the first time in 25 years, more Americans believe economic growth should be given priority.

How these costs are distributed geographically is of particular concern. While Democratic legislators from the East and West Coasts push for energy transformation, those representing constituents in the Midwest and other coal dependent regions worry about the potential costs of their reliance on ‘dirty’ electricity sources. Representative Mike Doyle (D-PA) is quoted in a recent Platt’s article on the issue of allocating emissions allowances, “How these credits are allocated is going to be key to determine if we can hold ratepayers harmless”. Doyle is not alone, according to this US News & World Report article that calculates the number of Democrats in the Senate (26) and House (96) that come from coal dependent states. While the impact of climate-change is global in nature, should the cost of GHG reduction be distributed evenly among all those who will benefit, or fall proportionately on those responsible for the emissions themselves?

Compromise surrounding the notion of cost distribution takes many forms. The Wall Street Journal’s Environmental Capital blog addressed the issue this week, pointing out that the proposed bill only calls for tougher emission standards on new coal plants licensed after 2015. Plants licensed in the interim won’t be required to meet the increased emission standards until the sooner of 2025, or the achievement of substantial commercial operation (2,500 MW) of clean-coal plants featuring carbon capture and sequestration.

Interestingly, commentary on the topic prior to the proposed bill’s release centered on coal’s uncertain future, with nearly 100 proposed coal power plants either cancelled or postponed in the US since the beginning of 2007. In large part, this uncertainty was the product of the Supreme Court’s 2007 ruling giving the EPA authority to regulate coal under the Clean Air Act and the overall financial risk associated with the future cost of carbon emissions. Is it possible that the proposed Waxman-Markey bill, generally supported by environmental groups, actually provides the certainty, at least in the short term, that traditional coal development has coveted? And if so, will it in fact spur an increased number of coal plants seeking licenses over the next six years?

Obviously, the discussion on this proposed legislation is far from settled, so speculating on its impact, or expecting a run on traditional coal plants, is premature. However, this leniency on traditional coal, like the lack of specificity on how emission allowances will be allocated, speaks to the massive challenge supporters of clean energy legislation will face in trying to determine who will bear its cost.

On this topic, President Obama advocates for the redistribution of emission allowance revenues through tax credits. The President’s approach is intended to soften the regressive nature of electricity rate increases. Similarly, could a targeted version aimed at tax-payers in coal-dependent states help solve the Capitol’s geographic challenge? While the Administration’s public stance on the issue of rapid action on climate-change appears to be softening, it will be interesting to follow how the possibility of EPA action factors into the discussion. While lawmakers from coal-dependent states carry substantial clout when it comes to passing a climate bill, there is far less they can do in the face of EPA action, a negotiating tool available to the Obama team and supporters of the Waxman-Markey bill in Congress.

Ultimately, the issue of fairness return us to a fundamental question- is it possible to make clean energy strides, sufficient to dramatically reduce the threat of global climate change, without altering the cost structure of our current energy infrastructure? While most agree that such changes are necessary, it is apparent Democrats in Congress (saying nothing of partisan challenges) are likely to continue to butt heads, arguing for low-cost legislation that protects the environment without unfairly burdening constituents.

The tactic obviously raises privacy concerns, even in the UK, where the use of closed circuit television (CCTV) cameras is common. In the US, the approach would likely be considered illegal - the Supreme Court has ruled that the use of thermal imaging technology, even for offenses like marijuana cultivation, requires a warrant.

Putting the privacy concerns aside for a moment, this thermal imaging tactic is intriguing. The backers plan to use the “heatmaps” to direct grants to improve insulation towards the homes and businesses that need it most. Because they’ll also be able to identify very cold properties, authorities also hope to be able to identify low income residents who cannot afford to heat their homes, and assist them appropriately.

In my mind, however, one of the more interesting aspects of this technique is the potential to create compelling visuals that demonstrate one’s consumption compared to their neighbors. Imagine receiving such a picture in the mail. After calling your local chapter of the ACLU, you might be motivated to curb your energy consumption.

In fact, comparison to one’s neighbors or peers is one of the most effective ways to drive behavioral change. That concept is central to start-up Positive Energy. The firm seeks to leverage behavioral science and encourage residential energy efficiency through implicit peer pressure, rather than through financial incentives, and is getting paid for doing so by utilities.

Positive Energy sends out statements that replace traditional utility bills to randomly selected customers that compares their energy usage to their most efficient peers. Through its “Insight Engine,” which uses demographic data in conjunction with energy data, the firm can compare customers to other like customers, therefore creating the most useful and informative comparisons. Renters are compared to renters, and 4,000 sq foot homeowners with pools are compared to other 4,000 sq foot homeowners with pools.

But Positive Energy’s statements do more than just compare consumption data, they also provide recommendations and coupons that encourage homeowners to become more efficient. Like the comparisons, these recommendations are targeted based on the class of customer. The statements of low income renters might include suggestions to unplug appliances when they are not used and coupons for CFLs. Higher-income homeowners might receive coupons or recommendations for more capital intensive projects, such as high-efficiency windows or even solar panels. These statements can also push existing utility programs, like residential demand response or new TOU rate structures.

SMUD, the Sacramento Municipal Utility District, was the first utility to employ Positive Energy’s approach, and found that customers who received these new statements reduced energy usage by about two percent. According to the New York Times and Positive Energy, almost a dozen other utilities are implementing this approach in areas across the US, including Chicago and Seattle.

Perhaps peer pressure is a good thing after all…

The industrial sector has been among the hardest hit in this economy. These important businesses can represent a significant amount of load within a utility’s service territory - one plant closure can mean tens of megawatts (MW) of demand destruction overnight. So why, with auto and manufacturing plants closing across the country, is the demand for demand response growing among utilities and end-use customers alike? Doesn’t the “naturally occurring” demand reduction in these turbulent times lessen the value of demand response to the system? The answer is no.

In its recently released “Power Trends 2009” report, the NYISO explains that the recent drops in electricity use (just over 1% for 2008 for the state, although NYC did see a slight increase in 2008) must be put in context - the state has experienced a 12.5% increase in consumption over the past decade. The NYISO writes “In the long term, as the economy emerges from the current recession, the factors that caused a double-digit increase in electricity use over the past 10 years are expected to again raise electricity consumption. This will require a sustained focus on maintaining adequate power supplies.”

Furthermore, the NYISO expressed specific concern about the spikes in demand that typically occur on hot days - the exact critical peaks that demand response is best apt to address:

“It is common for the state’s summer peak demand to spike nearly 40% above the average level of electricity use. During extreme conditions, the difference can be substantially greater. In 2006, summer heat waves produced a record peak demand of 33,939 MW, 80% higher than the average hourly demand of 18,520 MW… Peak demand during heat waves reflects the increased use and availability of air conditioning and cooling systems. The power system must have adequate capacity to meet this load. The additional 15,000 MW of demand during such peaks equates to adding approximately 30 power plants (of 500 MW capacity) to supply the electricity needs of New Yorkers on the hottest days of the year. The challenge for the NYISO is to foster an adequate power supply to meet those times of peak demand - even though they may occur for only a few days each year - while working to hold down wholesale electricity costs throughout the year.”

In other words, even if overall consumption drops in 2009, the system could still be pushed to capacity on a few hot days when everyone tries to find relief from the heat. Recession or not, homes and businesses will run air conditioners on the handful of days each year when extreme weather conditions occur. Furthermore, the same demand response markets that are created to address these critical peaks can also respond to emergency situations that result from system contingencies (e.g., transmission failures), that can occur any time of year, regardless of weather. And, regardless of the economy, it makes little sense to build thousands of megawatts of supply-side infrastructure that sits idle approximately 99% of the time.

Adding to the situation is the fact that the credit crisis has led to delays in important infrastructure projects and system maintenance. As the NYISO puts it, “Disruptions in the credit markets have resulted in loan defaults and other circumstances that are limiting or delaying investment in energy infrastructure projects.” This means that transmission constraints and distribution bottlenecks remain unaddressed and maintenance issues that could result in a loss of load remain unrepaired. Because demand response can be deployed on a locational basis (often where power plants cannot be built) it can tackle these unaddressed issues. Furthermore, demand response can be ramped up gradually over time and be deployed for years instead of decades. This flexibility makes demand response an even smarter investment compared to investments in supply-side infrastructure, particularly in this economy.
The NYISO isn’t alone in its outlook. In August 2008, the Maryland Public Service Commission ordered the state’s utilities to issue requests for proposals (RFPs) for additional capacity to address the possibility of supply inadequacies as early as 2011 or 2012, and specifically noted the significant role that demand response could play. Just last week, the Maryland PSC issued Order 82511, arguing that “unanticipated transmission delays or increased demand” would require more resources, and “probably at a higher price,” the prudent thing to do was to contract for long term capacity now; The Commission Staff concluded that the RFPs offered ”a low-cost reliability insurance policy.” In fact, the Commission seemed to have based much of their decision on statements from PJM’s Senior Vice president for Reliability Services who expressed concern that the region faced not only potential transmission delays, but new load growth in some regions due to the expansion of military installations in the Maryland and the potential for the Federal government’s economic recovery package to work as planned. Order 82511 stated:

“…this Commission will not rely on chance and good fortune to ensure that the lights will stay on amid a myriad of uncertainties, and the demand response resources bid into the Gap RFPs offer an opportunity to obtain low-cost insurance against highly disruptive reliability events, however unlikely they might be…Load forecasts change constantly, and inaction now could leave Maryland ratepayers vulnerable to reliability shortfalls if, as we all hope, the economy recovers over the next year or two. The Commission finds that procurement of modest demand response resources now represents a reasonable, low-cost hedge against demand growth and potential reliability shortfalls.”

Finally, even utilities that recognize the need for advanced planning and want to build power plants may be unable to do so. A recent report from Moody’s states that utilities may find the renewal of their credit facilities “significantly more challenging.”

In other words, expect demand response to remain in high demand.

I attended last week’s EUCI conference, Implementation of the Smart Grid for Electric Utilities, and two presentations helped answer this question by detailing utility initiatives to leverage technology as a means of controlling voltage on the T&D system.

Voltage conservation, often referred to as conservation voltage regulation (CVR) is not a new concept. In basic terms, voltage can be described as the pressure that moves electrons through our electric lines. In the case of the electric power grid, the system is divided into high- and low-voltage components, with long distance transmission lines (high-voltage) connecting our sources of supply to sub-stations, which in turn hands that electricity off to low-voltage distribution lines to customer meters. Most utilities are required to ensure that their end-use customers receive 120 volts with a 5% margin for error (114 to 126 volts). Similar to the pressure in a water hose, voltage degrades the further it travels from the source, meaning that customers at the far end of a distribution line will have lower voltage than those nearest to the sub-station. Furthermore, our residential appliances require only the 114 volt minimum, with extra voltage essentially spilling over the top. Higher-than-required voltage helps to maintain system reliability, but it also represents an opportunity for efficiency. In other words, if we could limit voltage fluctuations, consistently hitting the low-end of the 114 to 126 volt range, energy would be saved.

With our existing or ‘dumb’ infrastructure, a lack of meter-to-grid communication makes this calibration an inexact science and therefore utilities tend to aim for 120+ volts in order to ensure that the 114 volt threshold is never compromised. Because the most basic forms of CVR require only access to better system information, readily-available technology offerings (i.e. one-way communication) are sufficient to deliver meaningful improvement. A sub-station that gets periodic updates on actual voltage at the end of the line can better manage voltage throughout the distribution system.

In fact, CVR has been in use for over a decade. Since the early 1990s, Snohomish PUD in Washington has used robust decision models, an increased number of regulators in its system, and improved control technology to deliver voltage conservation, aiming for a 117 volt average rather than the standard 120. This effort translates to approximately 105 million kWh in annual savings (worth ~ $3.5 million) across the utility’s 300,000 customers. In 2006, NPR’s Morning Edition featured Snohomish’s voltage reduction efforts.

While Snohomish shows that an intelligent approach to existing distribution systems can deliver savings, other utilities are making plans to leverage AMI rollouts as a means of delivering voltage conservation. At EUCI, a representative of Dominion presented a case study on planned voltage conservation efforts in the company’s Virginia territory that are expected to deliver $1 billion in savings over a 10 to 15 year period. By accessing individual customer voltage levels through AMI (at 15-minute intervals), Dominion expects to operate its distribution system within a tighter tolerance range. As an initial step, the utility plans to distribute 36,000 meter points by the end of 2009.

Progress Energy Carolinas, also presenting at EUCI, specified plans to deliver 247 MW of peak capacity savings through its Distribution System Demand Response program. The program will connect devices (regulators, sensors, meters) and sub-stations to a distribution management system in order to drop voltage toward the 114 volt level at times of system need, specifically between 1pm and 7pm on the hottest summer days, with the expectation of approximately 10 voltage conservation ‘events’ per summer.

It is interesting to consider the differences in the stated goals of the Snohomish and Dominion programs (essentially, reduced energy consumption across the entire demand curve- resembling energy efficiency in terms of impact) vs that of Progress (peak demand reduction- resembling demand response). If energy efficiency and peak shifting are concepts rooted in permanent, persistent savings, demand response focuses on curtailment measures that are by definition not sustainable. Through this lens, utilities will need to consider the impact of voltage conservation or reduction, and determine whether it represents an efficiency gain absent any negative customer impact (a la energy efficiency), or a change in customer experience sufficient to warrant dispatch under only the most challenging grid-reliability circumstances.

Incentives are another critical element - under the Snohomish / Dominion construct, customers experience persistent energy savings in the form of reduced fuel cost (typically a pass-through from the utility standpoint), however the utility experiences reduced distribution revenue on which they typically earn a rate of return. Therefore, the ability for utilities to recover these foregone distribution revenues will help spur further development of voltage reduction programs, yet another example of the importance of getting incentives right when it comes to development of the smart grid.

At a time when many of us associate the smart grid with longer-term, game-changing technologies that reside somewhere on the distant horizon (vehicle to grid, for example), there are investments that can be made today (or years ago, in the case of Snohomish), injecting incremental intelligence into our existing grid to deliver legitimate value.