Green Mountain Power proposes to pay customers to reduce peak loads

COLCHESTER, Vt., April 2, 2002 — Green Mountain Power on Tuesday proposed a series of programs that would pay its commercial, farm and water heating customers to reduce electric loads during peak usage periods in order to protect electric reliability and to save money for all energy users.

The company filed with the Vermont Public Service Board Monday five new programs that it developed as part of a statewide and regional effort to develop “load response programs” designed to reduce peak loads when wholesale power prices spike during the hot summer months.

Green Mountain Power made its proposals in a Vermont Public Service Board proceeding initiated to develop statewide load response programs. Green Mountain’s proposals will now be reviewed by the Vermont Department of Public Service and the Vermont Public Service Board, the state’s two utility regulatory agencies.

“We think this is a terrific way of letting our customers participate in our efforts to avoid excessive energy prices during peak periods,” said James Brown, manager of energy resource planning. “In addition, the reductions we achieve benefit all our customers by controlling our power supply costs when heavy demand drives the market prices to extraordinarily high levels,” he added. “We appreciate the efforts of the Board and the Department to streamline this process to allow these programs to be rolled out in time for peak loads this summer,” Brown stated.

The programs rely on sophisticated technology to read customers’ meters remotely and telemeter the data back to Green Mountain Power. The technology is both reliable and cost-effective.

The five programs are designed to respond to the different opportunities of different types of customers. They are as follows:

“- ISO Class 1 and 2. This is a New England-wide program, designed for the largest commercial customers with a minimum curtailable load of 100 kilowatts. Customers will be notified prior to the need to curtail. They receive a financial incentive to reduce load, based on a price offered by the New England Independent System Operator. Customers may monitor ISO wholesale prices and modify their level of response, whether through curtailment or on- site generation.

For example, if on July 15, two major generating units go off-line and the wholesale power market prices spike to $300 per megawatthour, from a normal price of $50 per megawatthour, a large manufacturing customer participating in the program could receive $600 if it curtailed 500 kilowatts for four hours.

“- ISO Class 2 Extended. Also a New-England-wide program, it is offered to commercial customers with the ability to curtail at least 50 kilowatts of load. Customers will be offered a price per kilowatthour to reduce load, based on a projection of the wholesale market price.

“- Small C&I Efficient Environments. Targeted to smaller commercial and industrial customers who can reduce their load by controlling air conditioning and/or lighting.

“- Responsive Water Heating. New rental water heaters on the Green Mountain Power system can be controlled remotely using pager-controlled devices that will turn off the water heater during load response events.

“- Farm. Dairy farmers with an interruptible load of at least 40 kilowatts are eligible for this program. Farmers will be paid an annual fee to cover some of the costs of maintaining a generator to used reduce loads when necessary. Additional credits will be calculated based on the amount of energy curtailed.

The programs are designed to be simple and cost effective to operate. All the load response programs are voluntary and, except for ISO Class 1, they do not have penalties if the customer chooses not to participate in every event.


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