Consolidated Edison is taking a new approach to delivering reliable power that is as radical as the gentrification sweeping New York’s outer boroughs.

Con Ed filed a proposal on Wednesday with the New York Public Utilities Commission for a Brooklyn/Queens Demand Management Program, or BQDM, that it hopes can defer the cost of building a $1 billion substation.

Rather than spending that money on a new substation, the distribution utility wants to invest $200 million in novel customer-side load management programs, with an additional $300 million going toward more traditional utility investments, including some substation upgrades, in order to shed 52 megawatts of load from specific areas by 2018.

Meeting the needs of a changing city

When Con Ed reviewed the impact of a prolonged heat wave last summer, the utility found significant growth rates in certain neighborhoods of Brooklyn and Queens, said Robert Schimmenti, the company's VP of engineering and planning.

Throngs of new residential customers, often those residing in the large condo buildings that are replacing smaller apartment buildings, along with new small businesses, will drive electricity demand to a level that is 69 megawatts above the system’s current capacity by 2018.

To meet the growing power needs, Con Ed has plans to install capacitors and load transfers to allow for approximately 17 megawatts, but the rest will come from customer-side solutions at the grid edge. The combination should allow Con Ed to defer the construction of a new substation and feeder to 2024 and potentially even longer.

It will also allow Con Ed to test some of the solutions that could be commonplace if New York’s REV proposal, which calls for distribution utilities to transform into distributed energy-balancing platforms, becomes a reality in the future.

A new kind of demand-side management

Con Ed already runs demand-side management programs in both the commercial/industrial and residential categories of its business. Earlier this year, it doubled its demand response payments for the commercial program, which is designed to ease distribution congestion within its system.

But those demand response assets are only shedding load for a few hours at a time, which is common in most economic and capacity demand response programs across the country.

BQDM will embark on something entirely new, leveraging assets that can cover a twelve-hour peak period running from noon to midnight. In some parts of Queens, the peak can come as late as 11 p.m. in summer because of inefficient window AC units. Con Ed has more than 6 million window AC units in its territory.

The neighborhoods that Con Ed is targeting are largely residential, with some small commercial facilities, so it will not be able to rely on a few large commercial customers to shed the 52 megawatts of load.

Rather, the utility is getting creative on many levels. Some efficiency measures will be old-school, such as incentives to replace inefficient appliances and AC units. There will also be new building management systems, battery systems that can be tapped for hours at a time and maybe even a few microgrids.

Unlike previous efficiency and demand-side management programs, proposals will not be based solely on cost. Instead, the program "will use a more complex, matrix-based selection criteria that will consider a variety of solutions,” the utility wrote.

When it comes to small businesses, Con Ed will leverage the work it has already done through its green team. It will also reach out to community groups to gain customers interest and trust. “It’s not just about technology,” said Schimmenti. “There’s an education process.”

In many instances, it won’t be an either/or decision when it comes to traditional efficiency measures and more tech-heavy approaches, said Schimmenti. For example, building envelope upgrades could be carried out at the same time that new controls systems are being installed in buildings.

One of the agencies that could benefit is NYCHA, the city’s public housing authority. Some neighborhoods that BQDM is targeting have massive housing complexes that need more modern air conditioners, and which could be strong candidates as sites forstorageor even microgrids. If Con Ed can find workable solutions that make NYCHA buildings more efficient and improve the comfort of tenants, they could be replicated across the city as needed.

Four years, many unknowns

In many ways, BQDM is just the beginning of what may come from the REV initiative. But Con Ed can’t just pilot technologies for the better part of the next decade; BQDM is slated to be fully deployed by summer 2018.

Some measures, such as painting roofs white or installing more efficient ACs, are just an extension of Con Ed's existing CoolNYC program. But battery storage will also be part of the solution. Questions remain about who will own assets like batteries, how they will be staged to cover the twelve-hour peak, and how distributed assets will be linked back to Con Ed’s distribution management system to allow the utility to shape the load.

Con Ed is already thinking about the communications infrastructure that will be needed to backhaul information from customer sites to its control systems, “but how to do that is open for discussion,” said Schimmenti.

Another open question is what kinds of new rate structures may be offered to customers and small businesses. Rather than charging a flat rate, the offerings could range from one-time incentives to entirely new rate schemes for small businesses that can offer flexible load. “We’ll be thinking about pilots and demonstrations to test how a customer will react to different price signals or incentives,” said Schimmenti. “That will be in the cards.”

Schimmenti said it is too early to say what the utility’s request for information will bring in terms of customer-side innovation technology, or what the mix of cutting-edge and traditional technology will be. But whatever shape the initiative ultimately takes, it will certainly help Con Ed become much more innovative in its approach to meeting growing demand.

Schimmenti also said it's possible that Con Ed could deploy one or two microgrids in the outer boroughs by 2018: “We have a good partnership with the regulator, and we’re going to try some things and see what works,” he added. “That’s very unique for this business.”

Proposals for Con Ed’s BQDM program are due to Con Ed by September 15, 2014.