Deploy your load management strategy for results now, not later

Joe Polaski, MeterSmart L.P.

It’s time to question the conventional wisdom that says an electric load management system (LMS) should be designed from the outset with the total energy savings picture in mind. Most LMS are designed to meet long-term strategic goals, but disappointing short-term results often follow program deployment. That’s because the full-up cost of implementing a system designed for the end of the load management adoption cycle will continue for a significant period of time to outstrip the energy savings gained at the front end of the curve.

A more practical and cost-effective model is to adopt a modular, building-block approach to load management (LM) that scales the cost of the measure to the anticipated economic benefit of the LM activity. For example, a scalable hardware/software platform allows users to start off modestly, thus minimizing capital expenditures. The immediate energy savings gained at start up can then be used to underwrite the cost of further program upgrades that will allow more sophisticated initiatives to be adopted, as practical, to capture incremental energy savings.

Process not product

The three main load management program levels–static, dynamic and interactive–may be seen as a process driven by:

“- Utility incentives–these vary according to LM program level, from rebates for more energy-efficient equipment (static) to special time-of-use rates (dynamic) and real market pricing and power pool interaction through an independent service operator (interactive);

“- Metered data–how confident the business is in the quantity and accuracy of its data;

“- Forecasting–how well the business predict can its energy consumption versus production costs and energy price; and

“- LM assets–the extent to which the business already owns or can acquire measures to shift load, reduce it or switch to distributed generation.

Static load management involves identifying peak demand levels over the last few budget years, increasing that figure by x percent and then holding operations accountable for consuming something less than that. This requires little beyond notification when some demand or consumption threshold, say 80 percent, has been achieved in a given month. In this scenario, reporting software that offers actual time-of-use (TOU) budget information on a daily or weekly basis, replaces the standard month-end utility bill that provides only an indication of above or below budget expenses after it’s too late to make adjustments.

With dynamic LM, the building owner or manager identifies the required operational load, along with any portion of the load that can be dispatched. Doing so is contingent on deriving some economic benefit for going off the utility grid for a specific time period. It also requires coupling the metered load data with the latest pricing information to determine if a special lower utility rate, or other net benefit, would apply as a result of shifting or interrupting the load.

This level of information is beginning to be available, usually through third-party services like MeterSmart, L.P. which provides its utility customers with a host of metering and information processing services that the utility passes through to its customers. These services include validation, editing and estimating (VEE), real-time pricing (RTP) and billing, web-based presentation and others–tailored to each class of customer–to give all commercial, industrial and residential rate payers their total kW and kWh picture in near real time.

Interactive load management involves metering and monitoring demand (kW) and consumption (kWh), closely watching how the market spot price affects operations and projecting what price the market might pay. The interaction between these elements gives users the ability to decide whether or not to sell excess load on a given day to someone else. If attractive enough, a manufacturer, for instance, might decide to reschedule production to cheaper off-peak hours and sell the more expensive on-peak energy to the market. This emerging “power exchange” concept, considered by many as the wave of the future, will in essence allow producers to function one day as a manufacturer and the next as a utility—whichever contributes more to net income.

Metering considerations

In the static and dynamic stages, adopting a load management program doesn’t require significantly more instrumentation than already exists in most buildings. The data is easily obtainable from the utility master meter via a pulse or from an inexpensive shadow meter providing when/where alarming capability, modem and contact-closure output for interface to a bypass switch to start an on-site generator, or perform another control function. Metering systems with this capability are available today from about a dozen providers for between $1,500 to $4,000 installed.

The hardware/software functionality needed to support the power exchange will include the ability to (1) store day-ahead power pool baseline pricing, (2) post near real-time metered consumption for that day, and (3) inform the user if the contracted amount has been under- or over-consumed. This information will then be used to negotiate a selling price for any unused portion of the contracted energy amount at some price point between the previous day’s power pool rate and the current spot price. Tools are currently available that provide this degree of information, but they have yet to be bundled into a scalable, comprehensive hardware/software tool kit.

Some industry experts claim 20-35 percent energy savings can be achieved through effective load management. Unlike full-up turnkey systems, scalable platforms enable utilities and their customers to implement effective LM programs at a far lower cost relative to the delivered economic benefit.

That’s why it makes better dollars and sense to start with areas in the facility that offer savings opportunities that will immediately increase net income. These measures might include shutting off unnecessary equipment, more efficient scheduling of lighting and HVAC, etc. The early savings can then be used to subsidize more sophisticated operations, new maintenance programs and distributed generation strategies that will save money, increase comfort, secure the energy supply and extend the service life of the facility’s capital equipment.

Polaski is utility sales manager for Meter Smart. More information can be found at

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