Geer demand response program: Avoiding blackouts requires sacrifice

This is part two of a two-part article. The first part ran in the Sept. 16 Lakeville Journal and can be found online at tcextra.com.

NORTH CANAAN — Energy rationing is not just a theory for residents of Geer Village and Geer Nursing and Rehabilitation Center, where high temperatures sometimes mean the power has to be shut down.

The mid-summer’s mild weather brought only one shutdown, but there were two in late June.

Those who live semi-independently in apartments at Geer Village were not pleased with the imposed energy rationing.

For several hours in the afternoon, televisions and other appliances in their apartments were without power as the facilities switched to generator power.

And despite efforts by management to keep them advised, most didn’t understand what was going on.

Roger Liddell, who has a home in Sharon and is vice chairman of Clear Harbor Asset Management LLC in New York City, has combined his financial expertise with a keen interest in energy management.

Liddell said that he feels Geer’s plans for conserving power are sensible and necessary. Geer and some other large power users in the region have an agreement with ISO New England’s Demand Response Program to take themselves off the power grid on demand. (ISO stands for independent system operator.)

The Holyoke, Mass., non-profit company’s job is to manage the grid to avoid brownouts and blackouts caused by excess demand. Highest demand comes when air conditioners are turned on in large numbers (and kept on) during a heat wave.

How they buy power

First off, Liddell noted that the power companies don’t set rates for bill payers. Rates are driven by a market that is in turn driven by economic and weather conditions, the day of the week, or anything that will have an effect on demand in the “day-ahead market.â€

Liddell explained, in very simplified terms, that the power companies look at all the known and predictable factors to estimate the highest power need for the next day.

“They shop around, using a list of suppliers,†he said. “Each can supply a portion of power needs. They stack those market rates, or bids, up like building blocks, starting with the lowest price.

“When they reach the point where the estimated power need will be met, that becomes the top price, or marginal price. Everyone lower in the stack of suppliers gets the marginal price, no matter what they bid. That’s the way markets work.â€

The key, Liddell said, is to not overestimate need and set a marginal price that is higher than it needs to be.

“And when large customers like Geer can be pulled off the grid at a moment’s notice when demand is greatest, it pulls the peak down, and we all pay less.â€

During that June heat wave, Liddell said, demand response knocked 380 megawatts off the grid in minutes. While that number may be meaningless to most, suffice it to say it the response is called for only when grid conditions are nearing critical, and that the reduction likely averted a blackout.

Helping avoid blackouts

Liddell said he is sure Geer can meet demand response without it having an impact on residents. Despite the fact that Geer Village is relatively new, he said it should not be assumed it is anywhere near as energy efficient as it could be.

Geer COO John Horstman declined to say what Geer is paid for participating, beyond that it is not a lot of money.

“It’s mainly about helping to prevent a blackout, which would be a lot worse for everyone.â€

As for efficiency, they have taken many steps, including switching to compact fluorescent light bulbs and installing motion detectors on bathroom light switches.

“We use about 2 million kilowatt hours per year. After we put in the automatic lights in the bathrooms, we saved $8,000 and a whole lot of electricity in the first year.â€

Horstman said they would be willing to do more. But what he went on to say pinpoints the main reason there has been no overwhelming change in energy use: Doing anything more is not cost efficient. It’s not that Geer is unwilling to invest in an energy-efficient future, he said, but the bottom line has to come into play. For nursing homes and other businesses struggling to stay afloat, he believes it’s just not doable.

“Only certain things are hooked up to the generator. I’m sure we could reconfigure that, but it would mean hiring an electrical contractor, and that’s not a cheap proposition. But I’d be interested in knowing what more we could do to be efficient.â€

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