Demand Response

What is Demand Response?
8 Benefits of Demand Response Initiatives
Past Demand Response Initiatives: Operation Kill-A-Watt Day
Demand Response Case Studies

What is Demand Response?

Demand Response programs are energy saving initiatives that encourage utility customers to reduce their electricity consumption during times of peak electricity demand. Programs like these help electric utilities ensure that the demand for electricity does not exceed supply.

To encourage customers to voluntarily reduce their demand for electricity during these times, utilities offer benefits to customers who cut back on the amount of electricity they consume.

8 Benefits of Demand Response Initiatives

Demand response programs can be a cost-free and risk-free opportunity for customers to benefit nine ways. Customers can:

1. Reduce electric bills.
Customers can shrink their utility bills by the amount of electricity they agree to save during times of peak demand. Sometimes, a utility may even reduce bills by more than what customers have paid for electricity because it costs utilities more to generate power during peak times, even though most customers pay a flat rate for electricity.

2. Help ensure electric system reliability.
Customers who reduce their demand for electricity help maintain the reliability of the electric system.

3. Show responsibility, create goodwill.
Pitching in to reduce electricity demand and maintain system reliability shows customers are responsible creates goodwill for them.

4. Help reduce pollution.
To the degree that the demand for electricity drops, less coal and natural gas need to be burned to generate power, thus reducing such pollution as sulfur dioxide and nitrous oxide, which create smog and harm the ozone layer in the atmosphere. Demand response programs could reduce nitrous oxides by 31,000 tons a year.

5. Help conserve precious resources.
A nationwide demand response program could save 680 billion cubic feet of natural gas per year that otherwise would be burned to generate electricity. It also could improve water quality and relieve stress on land use by reducing the need for more power plants.

6. Help prevent price inflation during peak demand.
Cutting demand for electricity during peak times helps keep prices in check, which ultimately benefits users.

7. Generate revenue by using their onsite power systems.
Businesses that have onsite power generators can use them to reduce the amount of electricity they need from utilities, while maintaining their operations.

8. Manage electrical service more efficiently.
Demand response empowers businesses, state agencies, schools and consumers to better manage the amount of electrical service they need from utilities.

NEW JERSEYANS RISE TO CHALLENGE AND CUT ENERGY USE BY A WHOPPING 300 MW

On June 16, 2005, New Jerseyans significantly cut their electricity consumption between 2 p.m. and 4 p.m. as part of the voluntary energy saving initiative, Operation Kill-A-Watt.

“Everyone pulled together to reduce consumption by more than 300 megawatts and it didn’t cost anyone a dime,” said Keith Hartman, the creator of Operation Kill-A-Watt. That’s enough electricity to power 240,000 homes.

The Operation Kill-A-Watt energy saving initiative is the first privately funded effort of its kind in the state and the largest in the country.

Former Gov. James Florio, University of Medicine and Dentistry of New Jersey (UMDNJ) President Dr. John Petillo, Board of Public Utilities (BPU) Commissioner Connie Hughes and New Jersey Chamber of Commerce President Joan Verplanck called on New Jerseyans to cut electricity consumption at a recent press conference on one of the year’s hottest days. The three-digit drop in electricity consumption on June 16 overshadows results of other energy saving initiatives that typically achieve two-digit reductions.

“The feedback I’ve received from companies that implement energy saving initiatives is that the 300 megawatts is an incredible number,” said Hartman, who also is president of Public Energy Solutions, the company sponsoring the initiative.

The initiative’s objectives were to create awareness among New Jerseyans of a cost free and risk-free way to reduce their utility bills and help ensure a reliable source of electricity for the state. Ensuring reliable electricity is important because the state and the nation have an aging electric infrastructure.

“New Jersey could face serious problems in the near future if it is unable to satisfy the growing demand for electricity,” Hartman said.

The reductions in electricity consumption were measured using both customer data and independent electronic tracking. In southern New Jersey, demand for electricity dropped by as much as 100 megawatts. In the central and northwestern parts of the state, electricity use fell by up to 82 megawatts. In a portion of the state that parallels the turnpike from Trenton to the northern border with New York, electricity consumption dropped by about 125 megawatts. Significantly, participation in Operation Kill-A-Watt appeared to put downward pressure on real-time pricing of electricity.

“Many factors, such as weather, can affect overall electricity reduction,” Hartman said. “But the reductions we saw clearly showed the biggest contributor to reducing consumption was Operation Kill-A-Watt. New Jerseyans helped make Operation Kill-A-Watt a success.”

BPU President Jeanne Fox said, “In large part, last week’s statewide, electric-energy savings initiative was very successful because of the growing number of socially responsible New Jerseyans.”

Hartman said, “This is only the beginning.”

Demand Response Case Studies

NEW JERSEYANS CUT ELECTRICITY IN MANY WAYS

Operation Kill-A-Watt Participants Share Their Stories

New Jersey businesses, universities and government took on the Operation Kill-A-Watt challenge to reduce electricity consumption between 2 p.m. and 4 p.m. on June 16, 2005.

In central New Jersey, Gerdau Ameristeel in Perth Amboy saved nearly 44 megawatts by shutting down its reheat furnace—stopping production in its melt shop and rolling mill.

Darren MacDonald, the company’s energy manager, said,” We take electric power very seriously. It’s important for us to show that we’re environmentally responsible.”

In Newark, energy saving actions by the University of Medicine and Dentistry of New Jersey included raising by two degrees its global air conditioner thermostat that controls about 80 percent of the university’s 5.8 million sq. ft. of floor space throughout the state. It also shut down elevators.

University President Dr. John Petillo also had announced that as a result of Operation Kill-A-Watt, UMDNJ initiated a statewide system to alert its five campuses whenever there is a need to reduce electricity consumption.

In southern New Jersey, the Atlantic County Utilities Authority reduced motor speed at its aeration basin and used the smallest effluent pump. It also shut down paper and plastic recycling processors, turned off lighting and set air conditioning thermostats two degrees higher.

Authority President Richard Dovey estimated the authority’s Atlantic City location cut electricity consumption by more than half a megawatt, or 25 percent of its total consumption.

Farther north, Policy Director John Leon of New Jersey Transit said the transportation provider raised office air conditioner thermostats two degrees and encouraged employees to turn off idle equipment and lighting.

Francis Giacobbi, plant manager for Church & Dwight in Princeton, said the company switched off lights and raised air conditioner thermostats.

Montclair State University issued an advisory to staff, faculty and students urging them to save electricity. The university boosted air conditioner thermostats by two degrees and turned down thermostats on large hot water tanks at several buildings.

Students were asked not to shower between 2 p.m. and 4 p.m. The university’s catering service, which manages four dining facilities, cancelled dishwashing for the two-hour period.

The Board of Public Utilities (BPU) also supported Operation Kill-A-Watt by turning off banks of lights and raising air conditioner thermostats by two degrees. BPU President Jeanne Fox, said, “For those interested in reducing electricity consumption year round, the BPU has numerous incentive programs that can provide businesses and consumers with savings through the purchase of energy-efficient equipment.”

REDUCING ELECTRICITY CONSUMPTION SAVES UMDNJ $1 MILLION

Reducing electricity consumption is an important element in the effort to control costs at the University of Medicine and Dentistry of New Jersey (UMDNJ).

By taking part in Operation Kill-A-Watt demand response initiatives, UMDNJ reduced its utility bill by $1 million a year with energy efficient lighting that was installed throughout the Newark campus. Retrofit plans included many of the university’s 59 buildings at four main campuses across the state.

“Controlling overhead costs like electricity has freed up resources to continue improving the level of education and service provided by the university,” said Dr. John Petillo, university president.

Lighting typically accounts for about 35 percent of a facility’s electricity consumption, so making it more efficient produces considerable savings quickly.

Gary Wieland, a senior project manager at the university, said, “The lighting retrofit at the Newark campus paid for itself in 36 months through savings on the campus’s utility bill.”

Besides saving the university money, permanently cutting electricity consumption helps make the electric system that serves New Jersey more reliable. It eases the strain of meeting high demand for electricity on hot summer afternoons, generally between 2 p.m. and 4 p.m.

The campus’s lighting retrofit cut electricity demand by 1.7 megawatts and yearly consumption by nine million kilowatt-hours, or enough electricity for about 850 homes.

The retrofit includes classrooms, lobbies, administrative offices, labs, clinics and other areas. The cutting-edge lighting system replaced less efficient fluorescent tubes and incandescent lamps. The new system uses about 40 percent of the electricity to produce the same amount of light.

In addition to saving electricity, the new lamps are more environmentally friendly because less coal and gas needs to be burned to generate the electricity to power the lamps. They also last considerably longer than the old lamps, which cut maintenance costs.

“Anyone serious about saving electricity ought to look at lighting retrofits,” said Wieland. “It’s a no-brainer.”