Energy efficiency experts and environmentalists have long known that the best energy is the energy that you don’t use. That’s the premise behind energy conservation, as well as the guiding principle behind demand-response programs, in which individuals and businesses reduce or shift their energy usage during peak periods to help keep the grid reliable.
Pacific Gas and Electric Company (PG&E) provides a wide range of available demand-response (DR) programs and it continues to grow. Customers are embracing them in a way that benefits them personally and all Californians more broadly.
In all, approximately 245,000 industrial, business and residential customers have enrolled in a variety of demand-response programs. All told, these programs have a potential to provide approximately 365.8 MW of load-reduction capacity. roughly enough electricity for the instantaneous demand of about 275,000 homes.
Through Conservation, Companies Connect with Communities
And customers who participate in these DR programs acknowledge and understand their value.
“The Farmers’ Rice Cooperative (FRC) supports the community and environment that makes our industry possible. All FRC locations are enrolled in demand-response programs. FRC feels that demand-response programs are more important than ever to protect California from electrical grid capacity constraints. FRC is more than proud to support the community; it is integral to who we are,” said Joe Schloesser, the FRC’s director of Engineering and Continuous Improvement.
Terranova Ranch, a 6000-acre farm that grows more than 25 crops in Helm in Fresno County, participates in multiple demand-response programs.
"With operational constraints that don't allow us to completely avoid on-peak TOU, demand response gives us a flexible option to contribute when we can,” said Patrick Pinkard, manager at Terranova Ranch. “Being located in a small community, it's a nice incentive to know our actions can go a long way in helping surrounding homes and businesses keep their lights and AC on, often when they need it the most.”
Tishman Speyer is a global real estate developer operating in 29 markets in nine countries.
“As a high-volume user of electricity, Tishman Speyer wants to do our part in contributing to reducing usage on the grid. Participating in demand-response programs such as the Emergency Load Reduction Program allows us to take an active role for preventing rotating outages in California while ensuring our operational needs are met,” said Scott Lessard, the chief engineer at Tishman Speyer’s property on 400 Castro St. in Mountain View.
At Ardent Mills, “our core values are trust, serving, simplicity and safety, and being enrolled in the Base Interruptible Program through PG&E is consistent with our company’s core values,” said Trevor Meyers, plant manager of Ardent Mills’ Stockton Mill facility. “Not only are we concerned with serving our customers and communities with nutritious grain-based solutions, but we can also serve our communities by curtailing our power needs during periods of grid capacity constraints.”
Energy Incentive Programs for Business, Residential Customers
For business customers, for example, there is:
- Peak Day Pricing: Business customers get discounted rates throughout the year, except during nine to 15 “events” (four-hour blocks) when the electric system is strained, and rates are higher. Events typically occur on the hottest days of summer.
- Base Interruptible Program: Business customers with an average maximum demand of at least 100 kilowatts (kW) earn a monthly incentive for reducing energy consumption to prescribed levels when called upon. The Base Interruptible Program has been expanded to year-round enrollment, increasing the incentive to participate in the program by $1.50/kW-month.
- Capacity Bidding Program. Business customers work with third-party programs to create a plan that allows you more flexibility in deciding how you can earn incentives by reducing your energy usage when called upon. The Capacity Bidding Program has expanded to weekends and is implementing other changes that incentivize third-party companies to sign-up even more new customers for their programs to provide greater load reductions during grid emergencies.
- Emergency Load Reduction Program and the California State Emergency Program. Both are voluntary programs that offer positive incentives with no penalties, what’s described as a “all carrot, no stick” approach to mitigate the impacts of capacity shortfalls.
Residential customers can participate in:
- SmartAC. Customers get US$50 and a free air-conditioning checkup. The program is free and helps prevent power interruptions.
- SmartRate. Allows customers to take control of their electric rate and help conserve power when needed most. PG&E’s Bill Protection guarantee for the first full summer season means residential customers can try it risk free.
“We’re all in this together – PG&E, our residential and business customers, the state and others,” said Marlene Santos, PG&E’s chief customer officer and a company EVP. “This is a success story based on the engagement of our customers, their awareness of demand-response programs and how they are answering the call.”
Importantly, helping conserve energy isn’t just the job of customers who sign up to participate in DR programs.
During heat waves in 2020 and 2021, where the reliability of the grid was in jeopardy, PG&E customers stepped up and conserved energy. The result was that no more rotating outages were needed after Aug. 14 and 15 last year and none have been needed so far this year. During the August 2020 heat events, PG&E customers and those of other load-serving entities helped reduce the peak demand on the grid by as much as 4000 MW, roughly enough electricity for the instantaneous demand of about 3 million homes.