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!
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