Connecticut companies are receiving up to $100,000 in payments in exchange for reducing their electricity demand at peak times, according to a report in the Hartford Business Journal.
The program is an initiative by ISO New England, a non-profit Regional Transmission Organization to cope with increased demand at peak times during the summer. ISO New England pays customers $25,000 to $100,000 in exchange for reducing their demand at specific times. The amount depends on the level of demand reduction the customer is able to provide.
Energy demand management companies like Comverge and EnerNOC work with commercial customers to help coordinate the reductions and create a pool of conserved energy in emergency situations. The management companies work with clients to identify efficiency solutions they can implement to reduce overall demand. During a crisis, the management company will pay clients directly to shut down or reduce energy demand.
Connecticut State University, for example, receives $100,000 in exchange for reducing its electrical usage by 2,200 kilowatts, while Millipore receives $25,000 for reducing its demand by 1,300 kilowatts.
Meanwhile, Western Connecticut State University is able to generate $715,000 in efficiency savings by working with EnerNOC, its energy management company.
Sometimes companies are asked to shut down altogether, such as when Gillman Brothers was asked to shut down its 520 kilowatt hours of demand on June 24, when several generators in the grid shut down, reducing production capacity by 1,800 megawatts. Gillman was one of several companies that together reduced demand by 670 megawatts, allowing the grid to stay online.
However, Gillman had to shut down for three hours, causing it to take a loss for the day despite reimbursement for its sacrifice. The company pointed out that, in the event of a blackout, their facilities shut down anyway. Participating in the program, meanwhile, at least helps them recoup some of their losses.
Connecticut is the most active state in ISO New England’s demand reduction program, according to the report.
EnerNOC recently signed a multi-year deal to supply Tucson Electric Power (TEP) with up to 40 megawatts (MW) of demand response capacity beginning later this year using the company’s demand response application, DemandSMART, while World Energy Solutions just launched an online auction site for buying and selling capacity for demand response networks.