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TMT: Demand Response Program for Schools

Video Transcript

Starting June 1st of 2020, significant changes to the Demand Response program in our region could mean a drastic reduction in your school’s payout.

In this week’s Two-Minute Tuesday, we’ll talk about these changes and what they mean for your school district.

What is Demand Response?

Let’s start with a quick recap of Demand Response.

On days when our power demand is at its highest, relative to the “capacity” available to handle that demand, our grid — also known as PJM — has to ensure that everyone who needs power has it. This prevents blackouts.

Rather than installing expensive infrastructure that may only be used a few hours a year to meet that high demand, PJM started a program known as Demand Response.

In the Demand Response program, participants can voluntarily commit to reducing their power load during times that require it.

The only caveat is that participants have to prove that they can hit those levels during an annual 1-hour test event. In return, those participants receive money from PJM for both the test event and any emergency events, should they occur.

What’s new this year?

Historically, these real emergency events only posed a threat in the summer on the hottest days of the year.

Given recent history, however, the winter now also poses a threat in bouts of extremely low temperatures. So how has the Demand Response program changed?

Well, starting June 1st of 2020, the program will require year-round enrollments versus summer only of previous programs. Your total curtailment amount as a school district is now based off the lower of your two PLCs — both winter and summer.

Unless you use electric heat, this means your total curtailment is likely going to decrease dramatically — and so is your money earning potential.

Some curtailment service providers have adapted their software to accommodate these changes and may be able to offer you a unique solution to still enroll for summer only. But keep in mind: your total payout will likely be half of what it was in the past.

Ask your provider how this will impact you.

If your current provider has not yet contacted you about these changes, reach out and ask them how it’s going to impact your revenue potential.

And, if you have questions about how you can still capture some of the earnings — versus dropping out of the program altogether — reach out to us. We’re happy to help!

Thanks so much for watching. If you found this video helpful, please like, comment, or share below.

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Energy Buying for Schools – Energy ABC’s #1

Video Transcript

Hi guys! I’m Becky with Nania Energy.

When I talk to school business officials about purchasing gas and electric, I’m often given a lot of questions about how the process works, and there’s a lack of clarity and a lot of misunderstanding around it all.

So I had this idea to release this mini-vlog series called “Energy ABC’s” where we’re going to really hone in on the biggest obstacles that school districts face and give you tangible ways to overcome them.

Right now, we’re going to swap seats. I’m going to act as the school business official and go through some of the biggest obstacles that our clients have told us they face.

Obstacle 1

Energy is so complex. There’s so many layers.

You don’t even know which way to purchase — do you use a consortium? Or do you go directly through a supplier like Constellation?

You’re getting 22 calls a day from different providers saying they can offer you a better rate and more savings.

But how do you know who to trust?

Obstacle 2

You also have a lot of customers that you have to appease in your position. You have school board members, you have other administrators, you have the community. So any decisions you make for change you have to take very heavily and very seriously. And you have to make sure all the boxes are checked.

You also are managing a lot of aspects of school business from teacher contracts to lunch programs to maybe even transportation. You don’t have the time to dedicate to energy, and you’re not an expert in that field.

So how do you know what the right choice is to make? And how do you know what the opportunity cost is by waiting until your contract expires versus looking at it sooner?

Obstacle 3

And finally: how do you make your district more green? How do you become more sustainable and keep up with the Joneses, so to speak?

You’re being asked to bring in more green initiatives to your district while simultaneously being asked to cut your budget and reduce your spending. How is that supposed to work?

Learn how to make energy work for your district.

So, over the next couple of weeks we’ll release some videos that really show you how to address these concerns and make them work for your school district. If there’s something that we haven’t talked about today, shoot me a line or drop us a note and let us know of something you’d like us to discuss.

Otherwise, we’ll see you next time on Energy ABC’s where we’ll dive into the 3 main ways that schools purchase energy. Thank you!

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TMT: A Lighting Project + Your Energy Rate

Video Transcript

Hi! One question I get asked quite a bit is, “What impact would a lighting project have on my facility’s energy rate?”

If you’re looking to reduce your electricity usage, a lighting project will help you do that. But another surprise benefit is the impact it’ll have on your electric rate.

In this week’s Two-Minute Tuesday, we’ll show you exactly how.

What pricing factor does a lighting project impact?

One factor that suppliers take into consideration when giving an electric supply rate is your PLC number, or Peak Load Contribution.

This is the capacity and transmission — “demand” — charges that are attached to your facility.

Your PLC is measured over the 5 heaviest days of grid usage in the year. Think of a summer afternoon when everyone’s using a lot of air conditioning.

PJM will measure your usage on those 5 heaviest days and assign a PLC number (PLC tag) to you. The utility — in this case ComEd here in northern Illinois — will post that number to your account in December and it will go into effect the following June.

Lighting Project and PLCs

So here’s how a lighting project affects PLCs.

Think about an LED bulb that you’re putting in, replacing an old incandescent or metal halide or whatever bulb you currently have in your fixtures. The LED will put out much less wattage and use fewer kilowatt-hours over the course of those 5 days that the grid is measuring over the hot summer months.

The immediate impact you’re going to see is on the next month’s bill following the project’s completion. Your usage (kilowatt-hours) will be lower because those LEDs are using less energy compared to older bulbs.

You’ll experience a later impact to your PLCs in June the year after you complete the lighting project. So while you see an immediate change in your usage on next month’s bill, your change in PLC number will impact next year’s bill.

What does this look like?

Here’s a quick customer example.

Working with one of our local manufacturing clients, we started looking at new rates for their electricity contract that’s expiring this year. The did a lighting project for efficiency last spring.

While they got the full benefit in the summer from lower usage (the lighting project reduced their usage by about 1 million kWh), where we really saw the benefit was in the PLC number.

In November, we started looking at pricing for them. And the original pricing came in significantly higher than their current rate. Lighting Project and Energy Rate

Waiting until December when ComEd came out with new PLC numbers starting in June 2020, that PLC number was cut in half — they were in the 500 range and got cut to about 250. This resulted in around 14% savings over their current contracted rate.

A lighting project can impact your energy rate.

As you can see, a lighting project can impact more than your usage. If you’re considering a lighting project for your facility, feel free to reach out to us for guidance.

Thank you for watching! If you found this video helpful, please like, comment, or share below.

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2020 PJM Demand Response Changes

By Becky Thompson

December 19, 2019

BIG changes to the PJM Demand Response program are coming in 2020.

If you’re currently participating in or considering enrolling in the PJM demand response program, here’s what you need to know.

What is Demand Response?

Demand response is a program designed to ensure reliability of the electric grid during peak demand periods.

Companies that enroll in the program agree to reduce their electric usage when they receive curtailment alerts. In return, they can receive substantial payments from PJM.

“I don’t think we can curtail any usage.”

That’s what clients initially say when we bring up demand response.

There are a variety of ways businesses can curtail their usage without major disruptions to daily operations. For example:

  • Industrial or manufacturing clients can shift production to off-peak hours.
  • Hospitals and data centers can use non-emergency backup generators that meet program requirements.
  • Schools and residential buildings can raise air conditioning set points by 5 degrees and turn off unused lighting.

What’s changing in 2020?

Up until 2019, organizations could enroll in a Base Capacity program that only required participation during summer months (typically June through September). Since most businesses use more power in the summer than the winter, they could easily match their projections and earn big payouts.

Starting in June 2020, the only available demand response program will be PJM Capacity Performance, a mandatory year-round program for participants.

Quick Facts about PJM Capacity Performance

  1. Demand response program participants will be required to curtail their usage during summer and winter events.
  2. Summer season is June 2020 – October 2020 and May 2021. Winter season is November 2020 – April 2021.
  3. There will be two test events  — one in summer and one in winter — and participants will have to participate in at least one of the tests.
  4. The enrollment deadline for the 2020 – 2021 is in the first or second week of May. However, the program has been decreased by 20% for this year – so enrollment space could run out before then. Site that sign up by the end of February should be able to get their desired kW enrollment value.

Why the change?

Blackouts occur when the demand for power exceeds the amount of supply available. And in recent years, winter blackouts have become more likely than summer because there is lower total supply available. In the Polar Vortex of 2014, PJM energy consumers were at risk of experiencing a blackout during one of the coldest winters in history.

As a result, PJM was forced to rethink how they viewed grid reliability.

How You Can Prepare Yourself for PJM Capacity Performance

Here are a few things to keep in mind when considering enrolling in the new program:

  • The minimum requirement for curtailment is 100 kW.
  • Your curtailment ability will be the difference between your seasonal Peak Load Contribution (PLC) and your Firm Service Level (FSL). Since these can vary greatly between summer and winter, you may see a drastic reduction in your curtailment ability and potential payout.
  • To maximize your payout, ask your demand response vendor if they offer a seasonal performance program that allows you to have different curtailment values for summer and winter.
  • Enrollment in the demand response program is limited because the total MW allotment has been decreased by 20%. It could be beneficial for you to sign a longer Demand Response agreement to ensure your seat at the table in the future.

Despite the changes coming to the program, demand response could be a viable way for your organization to generate some additional revenue. Contact us to discuss if the program is a good fit for you.

 

About the Author

Becky is a Senior Strategic Energy Advisor specializing in the public sector, including schools and municipalities. She has been in the energy industry for over five years, working from the ground up as an account manager and then as an electric pricing team lead. Her background knowledge of the inner workings or an energy company helps her identify actionable strategies for making her clients’ energy strategies both easy and cost-effective. In her free time, Becky enjoys any activity that requires being outside and making her son belly laugh.

Becky can be reached at (630) 225-4561 or bthompson@naniaenergy.com.

Demand Response: What It Is & What It Can Do For Your Illinois School District

By Becky Thompson

January 29, 2018 – The two questions I get asked the most when speaking to public school administrators about demand response are:

  1. What is it?
  2. What can it do for my district?

In short, demand response is a program that helps ensure reliability for the electricity grid by getting customers to reduce energy usage during times of peak energy demand. Demand response matters because it provides monetary incentives for participating organizations (including school districts who are already facing immense pressure to perform).

Demand response also reduces the risk of blackouts by ensuring that demand does not exceed overall capacity (how much power the grid can handle). This boosts reliability of the grid by making sure enough energy is available when and where it’s most needed.

Here’s what it can do for your Illinois public school district, as well as some guidance for getting your school prepared for it.

Benefits of Demand Response Programs.

Demand response is a revenue generator for schools.

Demand response generates revenue for your school by providing monetary payments for participation in the program. When you sign up, you’ll designate a percentage of your usage during the test period that you can possibly conserve. So long as you comply with this amount during a 1-hour planned “test event,” you will be due these monies.

Demand response has significant earning potential for schools.

Enrollment in demand response programs is measured in kilowatts (kW) with a minimum of 100 KW.

Each year over the course of 3 years, school customers can earn about $5000 per 100 kw of enrollment and curtailment (reduction) during events.

Demand response is a low-cost, low-risk way to reduce your energy load.

Since demand response tests are done in the summer, they typically won’t affect normal class schedules. Some schools will have summer school, sports or other extracurriculars going on during that time. But it’s easy for schools to survey those schedules and work testing around them.

READ MORE: Demand Response on EIA. gov

Prepping for a Demand Response program.

Test events last one hour. These test events ensure the enrollment of kW a customer commits to is achievable.

Inventory your school’s summer activities & extracurriculars.

When scheduling demand response tests, your school should survey activities and schedule the tests around those dates and times. This is to minimize (or even eliminate) any impact on any summer school or extracurriculars.

Use a generator or building automation system (BAS) to reduce your school’s energy.

If scheduling around those times is too challenging, there are other ways to work around the demand response testing period.

Using a generator or some kind of building automation system can reduce the demand that your school might have during these periods without compromising on your needs. There are specific rules governing which generators qualify for the program, but energy advisors can assist with getting qualifying generators registered for it.

Keep a building engineer on site.

Having a building engineer on site can help guide you through the demand response testing. From turn down to restart, an engineer can provide an accurate assessment of what your school building can and can’t handle. They can help you make a more accurate estimate of how much you can save – thus putting you in a better position to hit your goal.

Demand response is a valuable offering to school districts, particularly in the summer months. By reducing your energy usage during near capacity events, you can actually reduce your costs and make your school some added revenue.

If you have any questions on demand response programs in your area, I’d be more than willing to help. Call our office at 630-225-4557 and we can discuss how demand response can generate revenue for your district.


About The Author

 

Becky is a Senior Strategic Energy Advisor specializing in the public sector, including schools and municipalities. She has been in the energy industry for over five years, working from the ground up as an account manager and then as an electric pricing team lead. Her background knowledge of the inner workings of an energy company helps her identify actionable strategies for making her clients’ energy both easy and cost effective. In her free time, Becky enjoys any activity that requires being outside and making her son belly laugh.

Becky can be reached via email at bthompson@naniaenergy.com or phone at (630) 225-4561.