Demand Response. A 28 Year History of Demand Response Programs for the Electric Cooperatives of Arkansas by Forest Kessinger Manager, Rates and Forecasting. Why do Utilities / Consumers Engage in Demand Response?. To gain an economic advantage in their bill.
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A 28 Year History of Demand Response Programs for the Electric Cooperatives of Arkansas
Manager, Rates and Forecasting
Thought - In the long-run, if your pricing signal (rate) encourages demand response, objective number 3 is met through a reaction to that pricing signal.
2. Voluntary control by a retail consumer using cooperative supplied instantaneous and hourly load data.
Controlled by Member Cooperatives 107 MW
Voluntary Retail Peak Avoidance 80 MW
Controlled by AECC 550 MW
Total Demand Response ≈ 737 MW
C&I VoluntaryControl 3%
Load Controlled by AECC 20%
Firm Load 73%
Note: AECC’s 2006 firm load = 1,971 MW
“It is all economics…”
In 1978, Arkansas Electric Cooperative Corporation (“AECC”) installed wholesale metering which recorded hourly kW demand by wholesale point of delivery. This hourly data could be processed into simultaneous hourly coincident totals for wholesale points of delivery for each member cooperative.
Further, AECC’s Board of Directors approved a wholesale rate design which included billing demands based on the member cooperative’s contribution to AECC’s simultaneous summer peak(s). Billing demands established during the peak(s) were charged until the new peak(s) was set the following summer.
At the same time, AECC’s Board of Directors adopted a cost of service approach which placed its fixed costs in the demand charge while variable costs flowed through the energy charge and fuel adder.
Demand Charge $ 12.14 / kW / month
Energy Charge $ 0.0199 per kWh
Needless to say, the reward for controlling peak was great. If there was potential for a member cooperative to control its annual peak, a load control system might economically be justified. The reward to the member cooperative was a reduced demand billing for the following year.
The long-term reward for controlling peaks is also great. All (even those who do not have demand response capabilities) benefit through AECC’s ability to avoid building future peaking plants.
(a) row crop,
(b) field flooding (rice), and
(c) catfish farming
(a) air-conditioning, and
(b) water heating
The member cooperatives control ≈ 107 MW of peak demand using approximately 40,000 radio control switches.
Twelve of Arkansas’ seventeen member cooperatives currently engage in direct load control.
In the 1990’s, member cooperatives began offering C&I retail members rate designs that mirrored AECC’s wholesale firm rate.
If the retail member avoided AECC’s peak, then the member cooperative passed along its wholesale savings to the retail consumer.
A communications system that allows the retail consumer instantaneous load data so that the consumer might evaluate potential peak periods.
Time based retail hourly metering so that the distribution cooperative can confirm that the retail consumer actually avoided AECC’s billing peaks.
Currently, at least ten member cooperatives offer some type of voluntary peak avoidance rate to their retail C&I consumers.
There are probably in excess of 29 C&I consumers taking advantage of voluntary peak avoidance rates.
AECC believes that voluntary control provides at least 80 MW of peak avoidance.
The retail member must be 5 MW or larger.
AECC places the load within an assigned block.
The retail load has three hour’s notice of interruption.
½ of the hours may be interrupted for any reason. *
½ of the hours may be interrupted only to avoid the interruption of firm load (for capacity shortage). *
The member cooperative implements AECC’s IC Rider with a retail tariff or special rate contract.
* Note: Interruptions for any reason will not begin until 1 Jan 2008.
While AECC may interrupt a load served under the IC Rider, AECC and the member cooperative will, if available, offer supplemental service to prevent the interruptible load from physically being interrupted.
When available from the market, AECC will offer interruptible supplemental service * to member cooperative for their interruptible retail members.
Supplemental service is offered at an incremental market price plus a small adder. The retail member may accept or decline the supplemental offer.
Interruptions for fuel economics, when combined with supplemental service, also introduces an element of “critical time pricing”.
Note: Interruptible supplemental service has a five minutes interruption notice.
Currently, Southwest Arkansas Electric Cooperative Corporation is using a voltage reduction measure to reduce their peak(s) by approximately one MW.
When Southwest’s voltage reduction measures are fully implemented, Southwest estimates that they will reduce their peak(s) by as much as 5 MW.
2. It is best to interrupt your interruptible loads.
One of the goals of the EERs is “Permanent Peak Demand Reduction”.