Philadelphia-area companies line up to reduce energy use

As the thermometer rose Tuesday, so did expectations at the Tasty Baking Co. It was braced to shut down a production line and empty a few freezers. All to save a bundle on energy costs.

That never happened. Demand on the electric grid that supplies power to the Mid-Atlantic never got high enough to require such cutbacks.

It peaked at 136,716 megawatts at 4:50 p.m. - not a record.

But across the region, Tasty and an increasing number of companies, hospitals, and universities - all large users of electricity - are lining up to offer energy reductions on such hot days.

Places as varied as the Comcast Center in Philadelphia, a produce cold-storage facility in Ephrata, a Chester County mushroom producer, and a North Penn water-treatment plant are ready to turn the temperature up on thermostats, to cycle a building's air handlers, to shut off equipment that could just as well run at night - all to reduce power use during hours of peak demand.

Each has a financial incentive to do it.

Many programs exist with utilities or other companies that, as "aggregators," can deliver demand reductions in return for lower energy payments.

The initiative is a response to an ever more stressed grid, run by PJM Interconnection in 13 states. In a command center in suburban Philadelphia, operators must match demand with supply.

The base load of power is provided by plants that can make power cheaply and cleanly. But as demand rises, PJM instructs plants that are more expensive and more polluting to rev up.

The cost of energy skyrockets at such moments. Last year, it ranged from 7 cents a kilowatt hour to 22 cents. Most customers don't see that fluctuation in their bills, but every charge reflects the cost of electricity overall.

Ultimately, as demand on the grid trends upward, new power plants might be needed.

Conversely, the grid can get "virtual generation" by asking large users to cut back.

This is both cheaper and faster, PJM spokesman Ray Dotter said. "It takes a while for a power plant to get up to full output" - not to mention building a new one - "whereas you can stop using power fairly instantly," he said.

Stabilizing the grid leads to energy security for the nation, energy officials say.

"Each time we properly manage the system so that we can pull power demand off, that's less new generation we need to build," said Tom Tuffey, director of the nonprofit PennFuture's Center for Energy, Enterprise and the Environment.

Nationally, "we feel like managing demand is a huge piece of the puzzle," said Katherine Hamilton, president of the advocacy group GridWise Alliance. "You can make fairly minor adjustments and get major benefits.

With technology and finesse, some buildings can reduce their loads - if only for a short time - by 20 percent or more.

Power reduction now is reaching even into our homes.

PSE&G in New Jersey has signed up about 100,000 residential and small-business customers who let the utility regulate central air conditioners via a small device on each unit.

When the utility gets the word from PJM, a microwave signal instructs each air conditioner to cycle off more often. If the unit was running 40 minutes an hour before, it may drop to 20 minutes.

Raymond Fernandez, director of demand management at PSE&G, said that through the program the utility can shed as much as 65 megawatts of power - about the capacity of a small coal-fired plant.

Customers who commit themselves to the program for two years - reachable at 800-854-4444 - get a $50 rebate plus a "new thermostat worth $200," said Fernandez. Or, they can cancel at any time, but get only $4 a month, June through September.

Peco has just introduced a similar program - reachable at 1-888-573-2672 - giving participants a $30 credit per month from June to September.

Peco has about 200 business customers signed up for demand management programs. One is mandatory. When a "curtailment event" is called, the company must cut back and receive a discounted electric rate throughout the year.

The second program is voluntary. Companies get a lesser financial incentive, but they are not penalized for declining to cut back when requested.

Malvern-based Liberty Property Trust, which owns 750 buildings, has enrolled 10 of its "average" office buildings in one of the Peco programs.

Thermostats typically are set at 70 to 74 degrees, said sustainability manager Marla Thalheimer. When the grid is overtaxed, temperatures might go up by one to four degrees while lights dim. "In a perfect world," she said, "people won't even know the difference."

"If you're the tenant, we don't want you sweating in the dark on a hot day," she added.

Universities have also been among the first to embrace demand-side management.

The University of Pennsylvania has agreed to shed three megawatts of power on demand. Last month, the university conducted a test run to verify how much it could cut back.

Officials were astounded when power use fell 13 megawatts - a 21 percent drop.

Entire offices went dark while staff members convened for meetings in a building's central location - or even in a nearby ice cream parlor.

Meanwhile, yes, the air handlers in some buildings were less active. Temperatures rose.

Did people notice? "The answer is that some did, and some did not," said Ken Ogawa, executive director of operations and maintenance. "In our case, it was only a one-hour action."

The trick to occupant satisfaction is to cut power elegantly, not just cut off the lights and the air-conditioning, he said.

Drexel University has embarked on a project with the Conshohocken company Viridity Energy, which Tuffey said was taking demand-side management one step further by offering real-time reductions.

While other companies often work a day ahead, prescheduling load reductions, Viridity's advanced software can factor in current energy prices, potential reductions, and "essentially sell that reduction back to the grid," said company president Audrey Zibelman, formerly PJM's chief operating officer.

"We don't wait for the grid operator to identify the opportunity for us," she said. "We identify the opportunity for the customer by allowing them to make an economic decision and voluntarily contribute reductions to the grid when it economically makes sense."

Drexel is installing equipment so it can operate as a micro-grid, managing not only its power use, but eventually incorporating renewable power sources such as solar arrays and wind generation.

Typically, "loads have not been controllable," said Chika Nwankpa, director of Drexel's Center for Electric Power Engineering.

"Now, we're entering this new frontier where we can transform these buildings to where they look to the grid like a virtual generator."