Peak Electricity Load Control Programs-a Solution for Home Electrification?

There are times during the day when electrical demand is high, during the morning when a large portion of the population is getting ready for work.  The lights come on, there’s an increase in hot water use, people are making coffee, or using the microwave or an electric stove or oven.  All these add to a morning increase in electricity demand, a peak in usage.  A similar increase occurs in the evening when people return home from work.  The weather can also influence electricity demand, hot weather will increase the need for air conditioning and maybe dehumidification.  Overnight usage is typically low periods of demand.

The hourly electricity consumption from an actual energy audit I recently conducted showing increased usage based on time of day.

A problem with periods of high electricity demand, utility companies often need to bring peaking plants (short term power generating plants) online to satisfy short periods high electricity usage.  These power plants are sometimes only used during peak loads and often have higher air pollution rates than the plants designed to operate all the time.  If demand isn’t met by the peaking plant, the provider must purchase power on the open market.  Sometimes the electricity rates during peak electricity usage are purchased for dollars per kilowatt, and then are sold back to the customer in pennies per kilowatt.  Not the best business model.

Electrical load management programs, sometimes called demand side management, are designed to help control peak electrical loads.  A good example of a load management program is electric off-peak water heating.  A water heater, or multiple water heaters in some cases, are installed in such a way that the power provider is able to turn the water heater on and off depending on the electricity loads of their system.  If enough controlled water heaters are tied to a system, a time of peak demand can be reduced possibly eliminating the need to start a peaking plant.

Other systems can also be controlled.  Heating and cooling equipment, electric vehicle charging, and even whole businesses can be placed on a load management program.  In the case of air conditioning, the power provider will cycle the AC, typically 15 minutes on and 15 minutes off.  Heating can be controlled a couple different ways, by utilizing a dual fuel program where the provider turns the electric heating system off during peak loads and a back-up system takes over.  There are also heat storage programs where electric storage furnaces, like a Steffes furnace, are used to store heat.  Another option is to use the earth as a heat storage reservoir.  A heat sink made of sand is built under the structure and electric heating cables or hot water tubing is installed.  This “heat sink” takes a charge overnight and releases the heat all day.  In the case of a whole business being disconnected from the grid, the business would need to have an automatic standby generator large or some sort of battery bank large enough to handle the entire electrical load of the business.

In exchange for having power turned on and off to certain devices or to a whole business, the customer receives a reduced rate or credit to their electric bill.  My water heater is on a program though my city where I receive a $5 credit to my electric bill every month.  I’ve never noticed when the water heater is being controlled.   There can also be a special electricity rates for the programs. One of the rural electricity providers in my area offers almost a dozen different programs with reduced rates ranging from $.0517 to $.0708 per kilowatt hour.  Their normal electricity rate averages around $.145 per kilowatt hour.

There are instances when controlling equipment isn’t a good idea.  Air source heat pumps used as the primary heat source in a cold climate are an example.  These heating and cooling systems are designed to run almost continuously and at a much lower heat output than fossil fuel systems.  If they are turned off for a couple hours, these systems need to operate for a much longer time for the temperature to return to the thermostat setting.  Comfort can become an issue in some cases.  Continuously circulating hot water systems can also be problematic when on an off-peak or storage water heating program.  These circulating systems tend to move the heat from the water to the air or ground around them.  I’ve been in homes where the customer runs out of hot water during the day, sometimes having to wait until the next day before the water heater is heated again.  This can also be the case in homes with many occupants or have a high consumption of hot water, like teenagers taking an hour-long shower.

There are a couple different ways a power supplier can control load management equipment.  The first is called ripple or power line communication.  A high frequency signal is sent down the existing power lines.  A receiver at the home will recognize the signal and turn on or off the equipment.  Usually, the equipment has its own meter, so the provider knows the monthly usage and bills accordingly.  A second method is to use radio frequencies to control the equipment.  This involve a series of radio towers so the signal can be broadcast across the electricity provider’s area.  A receiver, usually attached to a meter base is controlled to turn on and off equipment.

One of the electricity providers in my area recently replaced all their electric meters with smart meters.  These meters have several functions, they track electrical usage which the customer can view in real time through an app, they also record usage which can be accessed by the customer.  As an energy auditor, the hourly recorded electricity usage is handy for solving high bill complaints.  I’ve been told these meters can even supply demand by the minute, you can see when individual pieces of equipment turn on and off.  The meters alert the electricity provider when there is an outage (we’ve been told that if you pull the meter and don’t call the electricity provider, a line crew will show up and you may be charged for their time).  The meter also receives the ripple signal for controlling load management programs.

Operating costs is often the main reason a customer will choose to be on a load control program.  Let’s look at an electric water heater on an 8-hour interruptible program which has a rate of $.0708 per kWh in my area.  This program requires the homeowner to have at least a 50-gallon water heater and the water heater is controlled during peak demand, up to 8-hours per day.  The typical home of four people uses around 400 kWh in water heating usage per month. The normal monthly cost for water heating not on the program will be $50-$60 at the general service electricity rate of $.145 per kWh.  Place the water heater on the program and the cost drops in half to $25-$30 per month.    The cost to the homeowner to hire and electrician and install the equipment is usually around $300, about a year to pay back the investment.

These load management programs are common and popular in both my market and throughout rural areas of Minnesota.  I was surprised to find many areas of the country do not offer any load management options.  I don’t know if it’s the costs to the electricity provider to build out control systems for these programs or if there is some opposition from customers who don’t want their equipment controlled.  All these programs are optional to the customer, but I feel this is a missed opportunity.  With electrification of our homes becoming more common, the ability to control peak or possibly even shift demands to times when there is a surplus of electricity from wind and solar sources is one way to help this transition.  The best way is always to design systems that require less energy, but until our existing stock of homes with higher energy needs are improved, peak load management can be part of a solution.

2 Replies to “Peak Electricity Load Control Programs-a Solution for Home Electrification?”

  1. This is where Passive House can be used as a thermal battery. Homes that lose their heat or cool slowly can be charged during the day while the occupants are away and the energy is plentiful and cheap. If its a hot day, the AC goes on when the sun is shining and when folks get home, the home is cool and stays cool. The same but opposite for the summer. Heating and Cooling are the largest loads and combine this with the water heating time of use entire power plants can be avoided, and at enough of a scale, entire neighborhoods or towns can operate on existing infrastructure.

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