Con Edison Takes New Approach to Rewarding Customers for Smart Usage

Aug. 25, 2016
Energy Company Auctions Rewards for Customers Who Help the Grid at Peak Times

Con Edison has held its first-ever auction to get commitments to reduce the demand for energy when summer heat envelops New York. The company’s innovative Brooklyn-Queens Neighborhood Program produced a successful result:  Expected peak demand reductions of 22 MW by 2018 on afternoons and evenings when the company asks participating customers to cut back on their consumption of energy from the grid.

By deferring an expensive capital investment, the expected demand reduction will benefit customers as well as the utility.  In addition, it will continue to enable Con Edison to maintain its leadership position in the industry in terms of its reliability of electric service.

Samir Mohammad, a member of Con Edison Energy Efficiency team (right), with a representative of Union Beer in the beverage distributor’s warehouse in East Williamsburg, Brooklyn. Union Beer made energy-saving lighting upgrades with the help of Con Edison’s Neighborhood Program.

“Our Neighborhood Program is all about finding new strategies and technologies to help our customers manage their energy usage and still have the reliable power they need,” said Greg Elcock, who manages the program for Con Edison. “We decided to test out an auction as a way to encourage customers to help take pressure off our grid and we’re pleased with the outcome.” 

Under the Neighborhood Program, Con Edison helps customers in north central and eastern Brooklyn and southwestern Queens take advantage of energy efficiency programs, solar energy, energy storage and other strategies.

By reducing the need for power in these areas, Con Edison will defer the construction of a $1.2 billion substation.

Under the auction, companies known as “demand response providers” submitted bids indicating how much money they wanted for reducing reliance on energy from the grid at peak times. Then, Con Edison accepted offers from 10 of those providers and will pay prices ranging from $215 per kilowatt per year to $988 per kilowatt per year.

It is now up to the demand response providers to sign up Con Edison customers that are willing to reduce energy usage, or otherwise provide relief to the grid, in their stores, office buildings, warehouses and other facilities on afternoons and evenings when Con Edison requests it.

These customers can take steps such as deploying batteries in their buildings, turning off lighting in common areas, shutting down banks of elevators, and turning down their air conditioning a bit to reduce their power needs until the stress on the grid eases.

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