by Joseph S. “Jody” Wigington, Morristown Utility Systems
Rather than build more costly power plants that are difficult to bring online quickly in response to peaks, U.S. electric utilities are managing demand through innovative approaches, particularly with commercial and industrial (C&I) customers.
From voltage reduction to time-of-use pricing, some utilities are seeking cost-effective, low-impact approaches to shave peak loads.
The Tennessee Valley Authority (TVA), for example, has spent more than $100 million in load-shaving efforts since 2009, including having worked with 155 power distributors to institute demand response (DR) programs. TVA utilities realized compelling financial incentives after working with C&I customers to reduce their peak-power usage. As a result, TVA recently announced it will extend the DR programs for an anticipated 560-MW total peak reduction by 2012.
As general manager of Morristown Utility Systems (MUS), a municipal utility in eastern Tennessee that provides water and power services to some 5,000 customers, I applied for a TVA smart grid pilot project grant of up to $4 million. MUS won the grant in 2010 based on its proposal to implement two major load-shaving mechanisms:
- Managing our internal water system by employing variable speed pumps; and
- Using DCVR, or dispatchable conservation voltage regulation, by Tantalus to lower voltages coming from feeder stations to reduce peak demand in real time.
MUS recognized load-shaving opportunities in its internal water department that services 12,000 end users, 75 percent of which are C&I customers. To reduce the peak-demand hour, we pumped water off peak to fill tanks higher. During peak daytime hours, we drew from storage facilities and used less electricity from pumps. The strategy reduced energy costs and satisfied our primary goal: We reduced electric demand.
To control the water system, MUS used an automated supervisory control and data acquisition (SCADA) system to manage pump speeds and tank levels. As long as tank levels remain adequate, the system operates successfully and water delivery remains unaffected. Reducing 740 kW of demand load varies in financial benefits per season, but it averages some $6,800 a month. The demand reduction is about half the normal on-peak pumping load.
In addition for use in water management, the DCVR program addresses peak loads with minimal impact on MUS customers. MUS helped develop a software interface to present real-time, advanced metering infrastructure data such as low-voltage alarms and power quality directly to the SCADA system to automate voltage regulation, detect system issues and respond quickly to problems.
The upside is significant. First, MUS saves money. With hefty surcharges for the top four or five hours of peak days, MUS benefits immensely from reducing peaks. Second, reducing peak loads improves Morristown’s grid stability—a benefit to all involved.
In the TVA project, a portion of the Morristown grant went toward the implementation of a voltage-reduction program to decrease peak electrical load by some 6,000 kW a month. In contrast to many utilities, MUS used an automated, on-the-fly, voltage-regulation system with maximum visibility and control over endpoint voltages. The program enables MUS to save up to 4 percent in up-front demand costs by proactively reducing voltage in anticipation of demand peaks.
The DR applications were relatively easy to implement because Morristown already had fiber-to-the-home infrastructure. As MUS began to roll out its initial smart grid deployment, we anticipated the need for DR programs. Like elsewhere in Tennessee, Morristown had looked toward future energy demands from the beginning. With a fiber network that passes every customer on our grid, we were prepared to adopt load management and voltage reduction. MSU saved $440,000 during the past year—about $37,000 a month.
Anything that reduces demand improves the reliability of the entire U.S. electricity grid. MUS is proud to adopt creative approaches to address peak loads. These types of projects benefit everyone: Utilities cut energy spending and cost, fewer power plants are better for the environment and consumers receive better grid stability and power service quality. As a public power company serving our local community, MUS believes it is our responsibility to plan energy consumption through innovative technology.
Joseph S. “Jody” Wigington is general manager and CEO of Morristown Utility Systems.