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Austin Energy shows how demand response is done right

Jack Craver's picture
Reporter Energy Industry

I'm a freelance reporter and copywriter based in Austin, Tex. Most of my local reporting focuses on the issues facing city government in this rapidly-growing metropolis, notably land use and...

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Debbie Kimberly has worked in public power in hot places her entire 35-year career. Throughout that time, she’s seen the temperatures rise year after year, upping the stakes for utilities to deal with load management.

“It used to be that you didn’t see the extreme heat of the summer come until August,” says Kimberly, an Arizona native, who now serves as VP of Customer Energy Solutions for Austin Energy, a municipally-owned utility with roughly 480,000 customers.

This year, she adds, “The first time that it hit 100 in Phoenix, Arizona was the first week of April.”

Another record this year: on July 19 the Electric Reliability Council of Texas (ERCOT) hit a record peak of 73.3 GW. A little less than a week later, Austin Energy set its own peak record, hitting 2.878 GW.

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“We’re seeing these anomalies in the weather where we’re seeing higher prices earlier, so anything we can do to avoid those higher prices and reduce our reliance on the transmission grid during coincident peak in June, July, August and September helps reduce transmission costs for all of our customers,” she says.

Few utilities are in a better position to manage increasingly volatile summer peaks than AE, which has been at the forefront of innovative load management techniques for decades. In 2016, it was recognized by the Peak Load Management Association as a “technology pioneer” for its aggressive demand response initiatives.

“The utility enhanced its legacy C&I DR programs utilizing a similar strategy that incorporates open protocols and EPRI’s Demand Response Automation System in its C&I AutoDR program,” says the PLMA website. “An example of the results are that one building that historically was able to reduce load by about 25 KW per event has increased its load shedding to over 100 KW with Auto DR.”

In the early 90’s AE began offering customers one-way thermostats that the utility could use to cycle air conditioners on and off to reduce peak load. In 2014, AE launched a two-way thermostat program, involving nine manufacturers and more than 30 models of thermostats. In that program, the utility adjusts the thermostat by 2-4 degrees. There are roughly 45,000 households enrolled in those two programs, or about 10 percent of customers.

“The people who participate in those programs help every single customer, including those who don’t participate,” says Kimberly.

AE has also had a lot of success with its commercial and industrial demand-management efforts. Over the past decade the utility has achieved 177 MW of demand response. It has done a lot of work with the eight school districts in its service area as well as major retailers. The biggest participant is regional grocery store chain HEB, which has 26 accounts with AE. A lot more companies are waking up to the potential of energy-saving efforts, says Kimberly.

“There are selective types of load that you can turn off without affecting business. Grocery or big box stores can turn off alternating rows of lights in a store and their customers will not detect it at all,” she says.

In the fast-growing Austin metro area, smart meters have become an expectation for the thousands of people buying new homes and commercial property every week.

“The market has moved,” says Kimberly. “The market has been transformed.”

Preliminary data from the EIA shows that AE customers consume far less electricity and pay less than the great majority of ERCOT customers.

Paul Robbins, a local environmental/consumer advocate and unofficial AE watchdog, commends the utility’s efforts to reduce residential consumption and rates.

“Average residential consumption bills continue to be profoundly low for AE.  This is in all likelihood because of our conservation programs, building codes, green building program, and progressive rate structure,” he says in an email. “Only 1% of ERCOT residential customers have consumption lower than AE customers, and only 3% have average bills lower than AE customers.  35% of ERCOT residential customers have rates lower than Austin, but remember, people do not pay rates, they pay bills.”

When it comes to industrial and commercial customers, AE is better than average but is not a standout.  “In commercial, 44% of customers have bills lower than AE, and in industrial, it is 43%.  So we are on the high side, though not egregiously,” says Robbins.

While there are plenty of practical reasons for investor-owned utilities to encourage demand-management, Kimberly says that an IOU would be less likely to pursue it with as much vigor as AE. The utility does not answer to shareholders but to the public, which in Austin includes quite a few very active environmentalists.

“I look at our shareholders as the citizens of the Austin community,” says Kimberly.

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