Geer demand response program: Avoiding blackouts takes some sacrifice
NORTH CANAAN â€” The high temperature in July, recorded at the weather station at the nearby Great Mountain Forest in Norfolk, was 91.2 degrees. In August, it was a relatively moderate 84.8. With nighttime temperatures dipping into the 40s on more than one night, Julyâ€™s average was only 70.7. Augustâ€™s was atypically lower at 67.5.
September started out with high heat and humidity, making it feel more like the beginning of the summer than the end. And while those heat statistics are moderately interesting on their own, they have a deeper meaning for residents of Geer Village and Geer Nursing and Rehabilitation Center â€” where high temperatures sometimes mean the power has to be shut down.
The mid-summerâ€™s mild weather brought only one shutdown â€” 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 didnâ€™t understand what was going on. Several residents told The Journal it was simply a power outage, and they wondered what was wrong.
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 Geerâ€™s plans for conserving power are sensible and necessary. Since the majority resist all but the most minimal of energy-saving measures, forcing large chunks of power draw off the grid at critical times seems to be the best answer.
Geer and some other large power users in the region have an agreement with ISO New Englandâ€™s Demand Response Program to take themselves off the power grid on demand. (ISO stands for independent system operator.) The Holyoke, Mass., nonprofit companyâ€™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.
Keeping the power on has to do with more than just convenience. The worldâ€™s second largest blackout affected this area in 2003, and is believed to have originated in western New York state. A computer software bug delayed alarms and a rapid response that could have prevented the cascading failure.
The August 2003 blackout affected eight states and Ontario, Canada, and some 55 million people. It lasted less than two days. Most areas had power within hours. But the domino effect of losses was estimated at $10 billion.
ISO New England also has oversight of the regionâ€™s wholesale electricity market.
Liddell offered a very understandable explanation for how the finances of electricity work
One of the many reasons customers are intellectually in the dark is that they see a flat line, he said. They pay an average of the demand and donâ€™t understand that there are still peaks that soar much higher on any given day.
How they buy power
First off, he noted that the power companies donâ€™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, anything that will have an effect on demand in the â€œday-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.
â€œThey shop around, using a list of suppliers,â€ he said. â€œEach can supply a portion of power needs. They stack those market rates, or bids, up like building blocks, starting with the lowest price.
â€œWhen 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. Thatâ€™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.
â€œAnd when large customers like Geer can be pulled off the grid at a momentâ€™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 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.
â€œItâ€™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.
â€œWe 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. Itâ€™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 itâ€™s just not doable.
â€œOnly certain things are hooked up to the generator. Iâ€™m sure we could reconfigure that, but it would mean hiring an electrical contractor, and thatâ€™s not a cheap proposition. But Iâ€™d be interested in knowing what more we could do to be efficient.â€