Best Practice Guide

Food and Beverage Growers and Processors

Demand Response

Industrial

Demand response programs are an easy way for businesses to ensure their own reliable and affordable electricity. Administered by local utilities or third-parties, these conservation programs notify participating businesses when to use less electricity in order to prevent electricity shortages or high spot market prices. Some demand response programs provide financial incentives or other benefits to customers who agree to reduce peak consumption or shift electricity use to off-peak hours. Peak hours are those times when electricity use is at its highest, typically between noon and 7 p.m.

The California Independent System Operator (ISO) triggers demand response programs when operating reserves are expected to drop below seven percent, meaning that blackouts are more likely to occur. Low operating reserves occur because of high peak demand, unplanned generation outages, transmission problems, or adverse weather. If reserves drop, California ISO will notify program administrators, who then alert program participants.

There are two basic types of demand response programs: reliability and pricing. Reliability programs are triggered the day of an electrical event to prevent or offset an impending emergency. Some are voluntary programs, meaning that there is no penalty should a business be unable to reduce its load. Other reliability programs are binding and invoke penalties for non-action. However, these programs are designed so that penalties are wholly or partially offset by financial incentives, such as lower overall rates.

Pricing programs, on the other hand, are tied, in theory, to the spot market price of electricity. On critical days, pricing programs invoke higher rates for electricity used during peak hours. These higher rates are only put into effect for a maximum of 12 days a year.

Participants in either program type (reliability or pricing) receive advance notification when electricity conservation is needed or new rates are put into effect. This extra response time allows businesses to prepare building occupants and work processes, greatly reducing the cost and inconvenience of power interruptions. Participation in demand response programs also helps avoid costly involuntary interruptions.

Businesses interested in demand response programs should contact their local utilities to ask for a no obligation demand response audit. Similar to an energy audit, a demand response audit examines building equipment systems and operations to determine what opportunities exist for load curtailment. Your utility representative can then help you choose among the many programs available, matching your building's profile to the best-suited incentive packages.

Demand Response Tips for Office Buildings

Demand Response Tips

  • Set thermostats to 78 degrees.
  • Shut off unnecessary lights and appliances.
  • Postpone services like cleaning and maintenance until after 7 p.m.
  • Invest in enabling technology, e.g., enhanced automation, interval meters, and demand lighting controls.
  • Optimize use of on-site generation and fuel assets.
  • Obtain buy-in from employees who might be impacted and provide conservation education to increase awareness.
  • Review building operations to develop demand response strategies and processes ahead of time.

California ISO

California ISO is a not-for-profit public benefit corporation that manages the flow of electricity along California's open-market wholesale power grid.

Business Examples

S. Martinelli & Company is committed to demand response as part of the company's energy policy. However, processing perishable items such as fruit juice often doesn't lend itself to participation in demand response programs, since fresh juice can only be stored for 24 hours. Power interruptions have the potential to spoil thousands of gallons of juice.


Since Martinelli's creates "press and bottle" schedules a day ahead of time, participating in PG&E's Emergency Demand Response Program (EDRP) was relatively simple. With this voluntary, day ahead bidding process, Martinelli's was able to participate in several events lasting two to three hours at a time. In these cases, workers were simply tasked to other important functions - ranging from machine maintenance to cleaning - while operations were halted or slowed to save energy. In each case, the company shaved as much as 50 kilowatts of demand.


In order to manage peak shaving and shifting of energy loads, Martinelli's brought in Applied Power Technologies (APT). APT installed whole-facility meters in one building that provides real-time energy use data on peak demand, total consumption, power quality, and outages, if any. Martinelli's staff can access this data on a computer 24-hours a day, 7-days a week via a dedicated Ethernet connection. This data acts as a "shadow" bill for electricity and natural gas, basically, a second set of cost-controls to verify utility bills. With increasing monthly utility costs, even small errors can quickly add up to big losses.

Since utilities can only provide next-day data, the advanced meters allow Martinelli's to ensure that the company reaches its peak demand reduction goals when participating in the EDRP.

The advanced meters help turn a fixed-cost - energy use - into a variable cost by providing comprehensive data that can track performance and improve forecasting accuracy. Martinelli's is in the process of incorporating process controls into the metering and EMS systems, to further improve data collection and system optimization.


Resources

California Demand Response Partnership.

California Energy Commission, Information on Demand Response.

California ISO, Information on Demand Response Programs

Flex Your Power NOW! Demand Response Program.

Pacific Gas and Electric, Information on Demand Response information.

San Diego Gas and Electric, Information on Demand Response.

Southern California Edison, Information on Demand Response Information Page.

BPG Appendix 4: Demand Response Strategies (PDF download, 56 KB)