Bacon's Rebellion

Democracy Thrives in Sunlight

SCC Says 10% Conservation Goal Achievable

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by

James A. Bacon
in

Virginia can meet a legislative goal of cutting overall electric power usage by 10 percent over the coming 15 years, concludes a new study by the State Corporation Commission. The goal can be met by adopting market-based strategies such as “demand side management,” reports Garren Shipley with the Northern Virginia Daily.

The study spells out how conservation at periods of peak demand can lead to enormous economic efficiencies — reducing both fuel consumption and cutting costs. Writes Shipley:

Average demand in Virginia at any given time is about 13,000 megawatts, according to the report. But that number spikes by a factor of 2.5 during the hottest hours of the year. Because the grid has to be able to sustain the highest possible usage, utilities — and by extension their customers — wind up paying for a grid that can handle 32,500 megawatts all the time.

“These peak demands, which last for only about 100 hours per year, determine the required capacity of the utility infrastructure in Virginia,” the authors wrote. …

During a peak 28-hour demand period during August, the wholesale price of power paid by utility companies rose as high as $500 per megawatt-hour, according to the report. At its very peak, the price reached $1,000 per megawatt-hour. The average price is $57 per megawatt-hour.

The study, available here, makes a series of recommendations that would move Virginia towards a system that and equip and incentivize residential and commercial customers to shift electric consumption away from periods of peak demand.

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11 responses to “SCC Says 10% Conservation Goal Achievable”

  1. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    I love it. Demand side management, it’s like abuser fees for electricity.

    Hey not a problem. Fork over some money and I can achieve 100 percent conservation. Then the business community can use what I left behind.

  2. Anonymous Avatar
    Anonymous

    “a legislative goal of cutting overall electric power usage by 10 percent over the coming 15 years”

    Here we go again. Is that a 10% cut from todays usage or a cut in what the usage would be 15 years from now?Is it really a cut, or a cut in the rate of increase?

    Assume it is a 10% cut from todays use. How much does that cut the peak demand? If it is 10%, then we still need peak power equal to 19,000 MW.

    Or is it that you will cut the entire tenpercent out of the peak demand period?

    RH

  3. Larry Gross Avatar
    Larry Gross

    peak hour electricity costs 10 times more than non-peak hour electricity.

    who should pay for it?

    right now.. no matter who uses it or does not use it – everyone pays for it.

    What the SCC said, in effect, is that we can achieve SAVINGS in how much electricity needs to be produced if each of us decides whether or not we really want to pay want it really costs or not – vice using whatever we wish and having others pay for it.

    I liken this to two kinds of people at the time that a group of diners gets one check for the dinner.

    The first group are scrupulous about figuring out what their rightful share of the costs are and strive to pay their fare share plus a little extra just in case they might have underestimated.

    The second group – sees opportunity -to have a good meal .. for cheap.

    they don’t see it as a moral or even an economic choice but instead as a way to come out “ahead”.

    So.. of course the folks who are the scrupulous types DO want to know what the itemized costs really are… did their beer REALLY cost five bucks…

    but the other group.. doesn’t want to know if their beer cost $5.. in fact.. if they actually are confronted with the $5 beer.. their response is that they’ve been ripped off and they won’t pay…

    and of course.. someone else has to make up the difference…

    and that’s how peak pricing works.

    some folks want to use power no matter how much it costs and find comfort in having others sharing the cost…

    while others.. want to conserve.. and reap the rewards of conserving…

    that’s the way I see it…

    “don’t confuse me with the facts” is just another way of saying.. “I don’t care what it costs as long as I don’t have to pay it”.

  4. Anonymous Avatar
    Anonymous

    I agree with you, Larry.

    But it makes a difference if there are six people at the table or 600,000. At some point the calculations cost more than the savings.

    We will still need substantial peak power capability. Maybe we cut it by 25%, but that isn’t guaranteed. As it stands now, the power company knows it will get its money, but under this scheme, people may elect to cut back. If that happens the power company still has to maintain the peak capacity, on the off chance that people won’t cut back.

    Where is the savings then? It is one thing to suffer through a hot afternoon, its something else whne a heat wave lasts a week or more.

    The big users will find ways to cut back, under this plan: they can add shifts at night, or something.

    The people who will get hurt, and maybe die, are the little guys with very few options.

    RH

  5. Larry Gross Avatar
    Larry Gross

    I don’t think it is the big users that causes the peak load problem.

    I think it is caused by millions of people whose daily schedules … essentially coincide… both for electricity and roads and water/sewer, etc.

    the power company would calculate peak hour needs the way it always have.

    right now, you could ask the same question about how carefully and closely the power company is able (or not) to calculate “enough” for the anticipated needs.

    The beauty of conservation/demand management is that you don’t start out with a deficit of peak power facilities. It’s the other way around.

    You have a bunch.. already available to be online.. and conservation/demand management will “prove” itself at not by comparing how often the facilities operate with demand management strategies in place verses the time before they were in place.

    so what will happen over time is that the “window” with which the power company has to decide to add more peak power facilities will “widen”.

    They’ll have more time to determine the lead time for more facilities.

    and if demand management actually delivers in a major way, it will buy them wider planning windows for base power also.

    I just don’t see the level of risk in planning as increasing but rather decreasing…

    so even less chance of people getting “hurt” or “dying” since there will be more time to plan facilities.

  6. Groveton Avatar
    Groveton

    “Sub-group 4 believes that if Virginia adopts policies whereby utilities collect money
    to finance a Public Benefits Fund (“PBF”), then a mechanism similar to the Electric Utility
    Consumption Tax (Code of Virginia § 58.1-2900) should be given strong consideration by
    the Commission. The structure of the consumption tax assigns the collected tax revenues
    proportionately to the State Consumption Tax (similar to a gross receipts or sales tax),
    Special Regulatory Tax (to fund certain operations of the State Corporation Commission),
    and Local Consumption Tax (similar to a Business, Professional, and Occupational License
    tax).”

    Darrell is right – this “sun-group 4” is on a tax hunt.

    Do you believe Dominion Resources or the state legislators in their pockets? I don’t. Hundreds of years have proven that you should never trust a monopoly or the political puppets on the ends of the strings the monopolists pull.

    Want to conserve energy? Build water towers. You know, those big bulbous towers that hold water in the top. Pump the water up at night when electricity is cheap. Then gravity forces the water down and creates water pressure. Maybe we start out in the Piedmont Environmental Council by demanding that the people who live there stop using individual wells and start building huge water towers.

  7. Larry Gross Avatar
    Larry Gross

    we need to separate out the ideas that show promise from the ones that are clinkers from the get go…

    BEFORE we bring in the “you can’t trust government and industry” bomb

    By using that “bomb” first.. we kill every initiative where it offers promise or even if it makes sense.

    We effectively KILL innovation and reform…. when we start off saying.. in essence.. that NOTHING is worth pursuing.. by .. neither government nor industry.. because of the “trust” issue.

    I think this basically is a backdoor way of advocating the status-quo.. EVEN THOUGH the status quo is ALSO owned/operated by government and industry.

    If reform needs to part of the equation then … “make it so”… as a way of showing that something that makes sense won’t produced benefits UNLESS reforms are also part of it…

    Demand Management .. by the way.. is a legitimate and credible approach… undertaken by industry itself… both for internal operations AND for it’s sales and services.

    am I wrong in what I am saying here?

  8. Anonymous Avatar
    Anonymous

    the power company would calculate “peak hour needs the way it always have.

    ………

    so what will happen over time is that the “window” with which the power company has to decide to add more peak power facilities will “widen”.”

    So, what is the point? If the problem is caused by millions of people whose daily schedules essentially coincide, where is the savings? If the power company still needs substatnial peak load capacity, where are the savings?

    Who is doing the work, and who is getting paid for it? If the power company says, look, we are going to introduce this new fee so that it will be to your benefit to work for us in order ta avoid it; is that really a benefit?

    If someone can convince me that this will actually lead to lower power bills while providing substantially the same service, then that is one thing. If it turns out to be lower power bills for less service, or less useful service, then I’m not so impressed.

    If it turns out to be higher power bills and more money to Dominion for the same service, then I’m not impressed at all.

    RH

  9. Larry Gross Avatar
    Larry Gross

    “If the power company still needs substatnial peak load capacity, where are the savings?

    Who is doing the work, and who is getting paid for it? If the power company says, look, we are going to introduce this new fee so that it will be to your benefit to work for us in order ta avoid it; is that really a benefit?”

    you’ve got this wrong – as usual.

    It’s not the power company that needs the peak power. It’s YOU!

    and it’s not the power company than pays 8 times the regular rate for that power… and it SHOULD BE YOU!

    but right now. those folks who use electricity that cost 8 times the regular rate don’t have to pay for it because others.. who don’t use electricity that cost 8 times normal are forced to help pay for it.

    The remedy to this is to let YOU choose how much you want to pay..
    and let others make that same choice.

    You, of course, like the status quo because you get to use electricity that costs 8 times as much as non-peak but you don’t have to pay for it..

    so you’d be opposed to changing the current setup .. because you’d have to pay more – right?

    makes sense if I an YOU but not me.

    I say.. it’s your business how much you want to pay..and it’s my business how much I want to pay..and if I choose to NOT pay 8 times normal for electricity by waiting 2 hours for my shower then that’s fine for me.

    If you choose NOT to wait 2 hours then that’s fine too..but it’s your choice for the money also.

  10. Anonymous Avatar
    Anonymous

    you’ve got this wrong – as usual.

    It’s not the power company that needs the peak power. It’s US!

    If your argument that the big guys are not the cause of the problem, but the hordes of little guys, who need the power when they need it, then what’s the difference in how we pay.

    I agree that it is more equitable to pay the exact cost. I’m on your side on this, so I don’t know why you are arguing.

    What I Don’t believe is that this will cause very much change in the total amount of peak capacity tha will be needed. Just as you say, It is US that needs the peak power.

    If it does not SIGNIFICANTLY reduce the need for peak power, then it is just a rate increase for the power company. If it does not significantly reduce the nead for peak power AND is requires a lot of extra effort, equipment, and accounting, on EVERYBODY’s part, then I’m not sure I see where the savings is.

    AND there is the risk that it will lull us into thinking we need less peak power until some real emergency hits, and we don’t have it.

    I certainly don’t agree that there will be significant savings for the average user, but the big users will be able to find a way to take advantage of the new rules.

    The way I see this is that I will be doing work for the power company to save a penny here or there on my bill, but the power company will save millions.

    RH

  11. Larry Gross Avatar
    Larry Gross

    ..”then what’s the difference in how we pay.”

    see you don’t think that if you and I and thousands of others have a choice on the cost of that shower that some of us won’t delay it for two hours.

    If 1/2 of us delay.. then we need 1/2 of the peak power…

    if 3/4 of us delay, we need only 1/2 peak power.

    so.. if you ask me if I would delay vs paying 8 times as much.. it’s a no brainer for me.

    Now for others.., maybe not.

    the point of all of this is that each individual gets presented with the choice AND the financial responsibility for that choice.

    You don’t think it will change people’s behaviors.

    I do.

    Let’s find out.

    If you are right, we have not lost anything…

    if I am right, most of us who are willing to delay end up at worst with the same electric bills and only the proliferate “suffer”.

    I’ll be honest.. if the proliferate “suffer”… it sort of sounds like an oxymoron…

    🙂

    If someone tells me they lost their car because they spent their paycheck before they made their loan payment… am I supposed to be sympathetic?

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