Solving Peak Issues through Demand Response

By Steve Saenz, Austin Energy

Austin, Texas, is known for a great university, lots of music, and one of the largest, most progressive municipal utilities in the nation. Its 380,000 customers and 880,000 residents make Austin Energy the 10th largest municipal utility in the country, but its dedication to the environment is what has made it remarkable.

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Through its website, Austin Energy encourages consumers to sign up for any one of more than 10 energy efficiency, demand response or renewable energy programs. Austin has all the customary programs, like rebates for home improvement projects and solar panels, but they’ve stepped outside the box as well with some programs, like one that encourages customers to volunteer to reduce energy use upon receipt of a phone call or text message on peak summer days. They’re even sponsoring a “Citywide Kill-A-Watt Challenge,” a contest challenging participants to reduce as much energy use as possible during the summer months, offering monthly prizes for those who save the most.

Austin’s accomplishments are numerous. Its GreenChoice renewable program has been ranked first in the nation in sales for the fifth year in a row. It was named as a 2006 Energy Star Partner of the Year and continues to receive accolades from the organization. And, it has just released a comprehensive Climate Protection Plan with the City of Austin. Cumulatively, Austin’s energy efficiency, demand response and renewable energy programs provide the city as much energy as a 500 MW plant-a substantial amount for any utility.

One of the utility’s most interesting programs offers consumers a free programmable thermostat complete with installation and warranty (normally a $200 to $280 value). While a programmable thermostat can save consumers up to 15 percent on their electricity bills according to a DOE estimate, these thermostats have an additional feature built into them. A slim communications module inside the thermostat enables Austin to cycle back air conditioning usage on peak days. While this slight change in A/C usage is often unnoticeable to the consumer, the overall program typically shaves 45 MWs off of Austin’s summer peak.

Any inconvenience to the participant is offset by another added benefit: an easy-to-use online programming tool that enables consumers to program their thermostats via the web. Imagine that a customer’s daughter calls and wants to invite some friends over for a pool party. With a thermostat like this, the customer could go online from work and turn the air conditioning up so that by the time the girls arrive, the house is cool. Advanced versions of the technology installed at other utilities would enable the customer to turn on your pool pump from the web as well, though Austin’s system does not presently support this feature.


Austin Energy’s Power Partner Web Portal allows participants to program their thermostat online, anytime and from anywhere.
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This technology, known as demand response, is the grandchild of “load management” systems developed in the 1970s and ’80s and pioneered by companies like Lucent Technologies and Scientific Atlanta. The migration to fully functional two-way communicating thermostats and “smart” appliances is still under way and includes issues like AMI network integration, “smart” grid implications, and advanced pricing structures. Regardless of these continuing advancements, the technology is already reaping huge benefits for utilities across the country.


Austin Energy’s Power Partner Program gives participants a free demand response-enabled programmable thermostat.
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Austin’s choice to implement demand response was made as central air conditioning-induced peaks grew summer after summer. Austin began to look for ways to solve its peak capacity challenges without building new plants or purchasing power off of the spot market. Austin evaluated various solutions and opted for a portfolio approach to peak management, including a broad range of strategic conservation, load shifting, and peak clipping resources that provide value to participants while at the same time allowing the utility to keep peak procurement costs to a minimum.

The Choices

As Austin began to plan its demand response program, many technical considerations arose and answers to technology, communications and implementation choices were not immediately obvious. Austin’s team conducted in-depth research and analysis of nearly every major vendor in the space, coupled with interviews with other utilities currently implementing demand response programs.

At this stage, Austin was searching for the most cost-effective solution that would meet the goals laid out for the program. As with any technology, the trade-offs between functionality and cost factored into the value equation heavily. Some of the key decisions to be made were choosing one-way vs. two-way communications, VHF (lower frequency) vs. 900 MHz (higher frequency) paging, and determining the right mix of control switch and “smart” thermostats for Austin’s service territory.

Two-way communicating “smart” thermostats are essentially the same as their one-way counterparts, except that they can provide data back to the utility. While this feature is most commonly used to verify that the thermostat received a control signal, advanced models can also report temperature data and overall usage trends. The trade-off for these extra features is cost: A two-way system can often cost more than double that of a one-way solution. The extra cost also extrapolates over the entire life of the system as much higher communications costs factor in.

While the two-way model enables some interesting features, it achieves the same load shed response as a one-way thermostat. Concerned about keeping costs at a minimum, Austin investigated different methods of system measurement and verification, like physical inspections and statistical sampling, to verify system performance. These options provided Austin the data and confidence needed to deploy the system without a full two-way communications network.

Another technical issue the team considered was the communications frequency level. Higher vs. lower frequency paging can make a significant difference in a load management program as signal strength and penetration determine whether an end device receives the utility’s signal to control. For a demand response system-especially thermostat-based, where the receiver is static and indoors-VHF (lower frequency) has proved to provide markedly better reception than 900 MHz (higher frequency) due to its heightened ability to penetrate buildings and walls. Higher frequencies are often stronger for mobile endpoints-like a police car, for example-as these signals are more inclined to reflect off of objects and therefore provide more seamless coverage.

Austin already had an operable VHF communications infrastructure that was being used by other utility departments. Use of this system would enable the utility to internalize communications costs and reduce expenditures. Coupled with VHF’s better performance for demand response as compared to 900 MHz, this additional cost savings made VHF an easy choice for Austin.

This decision narrowed Austin’s choices for a thermostat vendor. Austin considered various features and benefits of different options, including reliability, quality, and ease-of-installation and eventually chose Comverge’s “SuperStat” thermostat for the deployment.

Austin initially launched the program as a pilot of 3,000 residential points, but within six months it had ramped up to 10,000 points and began to broadly market the program. The program presently has more than 31,000 single family residential participants, 33,000 multi-family participants, and more than 5,000 small commercial participants.

The program offers no cash or rebate incentives to participants when they sign up-only the SuperStat, which is a difference from many of the nation’s demand response programs. The program may operate any weekday during the summer months of June through September from 4 p.m. to 8 p.m. The program is never run on a holiday or weekend.

Austin currently cycles back usage approximately 10 minutes out of 30-what is known as a 33 percent cycling strategy. Austin also uses an “adaptive algorithm,” intelligence that customizes the cycling time to each individual compressor, thereby ensuring that all compressors participate. As compressors can be oversized or undersized for the amount of space they cool, their run times vary considerably, from an oversized compressor that hardly runs at all to an undersized compressor that runs constantly. Without an adaptive algorithm, a 33 percent cycling strategy would ask each of these compressors to turn off for 10 of 30 minutes which may not affect the oversized unit at all, while considerably affecting an undersized unit.

The adaptive algorithm records the compressor’s run time on an hour-by-hour basis, so that the compressor will be cycled back 33 percent from its run time of the previous hour when an event is called. For example, if a compressor ran 15 minutes on and 15 minutes off over the past hour, the usage would change to 12 minutes on and 18 minutes off during an event. This allows for equitable cycling across the population and provides greater load shed and higher comfort levels for participants. Data from across the country has shown that this translates into an average indoor temperature change of 1 to 3 degrees over an event, which is unnoticeable by many people.

Austin’s customer survey response data is evidence of the program’s non-intrusive design. Even with 12 events in 2005 and 13 in 2006, all survey respondents said that they would recommend the program to another person, with more than 80 percent responding “definitely.” Over three-quarters of respondents identified their experience with the program as “excellent.”

The continued success of this program is evidence of Austin’s leadership in demand response system planning and development. Austin’s dedication to alternative means for meeting peak demand has built a successful, cost-effective peak portfolio that continues to challenge and inspire utilities across the country to re-consider the status-quo and make “smarter” choices for their customers.

Steve Saenz is program manager of the DSM Energy Services Unit of Austin Energy, a community-owned electric utility and a department of the City of Austin, Texas.

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