New York is struggling with the country’s worst coronavirus outbreak, but it’s also pushing ahead on its ambitious clean energy goals. Those include major expansions of wind and solar power, more energy storage to manage that intermittent supply — and, on the demand side of the equation, programs that can turn utility customers from passive consumers into active grid-balancing participants.
Take GridRewards, a program launched last week by community-choice aggregator Sustainable Westchester and building energy software and demand response provider Logical Buildings. Beyond providing efficiency tips and energy usage insights, GridRewards will give Sustainable Westchester’s 115,000 or so customers a chance to get paid for reducing energy consumption when utility Con Edison needs to relieve its straining grid.
That’s a timely offer for Westchester County residents stuck at home under the state’s COVID-19 restrictions and looking for ways to reduce rising utility bills. It’s also a way for Logical Buildings to gain load-reduction capacity in the residential sector, which is seeing electricity usage rising even as New York City’s locked-down commercial sector's demand is falling.
“Given the current situation with office buildings in New York, it actually gives us a massive advantage,” David Klatt, Logical Buildings’ VP of operations, said in an interview this week. “We’re deploying to where the load has shifted.”
Elta Kolo, grid edge research content lead at Wood Mackenzie Power & Renewables, noted that residential demand response is a tough proposition for utilities, with high customer-acquisition costs and challenges in achieving reliable results and keeping customers engaged — particularly if customers grow weary of being asked to reduce power too often.
Still, the Sustainable Westchester program is rolling out at a moment when New York residents under stay-at-home orders are likely to be much more sensitive to rising utility bills. “This is the time to engage customers, because of that hypersensitivity,” Kolo said.
Taking advantage of Con Edison's new smart meters
While the move is timely, it’s also been years in the making. GridRewards is one of the first demand response programs in the state to take advantage of newly installed smart meters from utility Con Edison, which allow it to track residential and small-commercial customers’ energy use in 15-minute increments, a prerequisite for participating.
Con Edison has installed more than 2 million smart meters to date and plans to deploy nearly 5 million electric and gas meters by 2023. That’s a much larger pool of potential participants than the roughly 10,000 large commercial customers that make up its historical demand response pool, Klatt said.
Having smart meters is only the first step, however. It took a year for Logical Buildings to integrate with the Con Edison's Green Button Connect smart meter data system in a reliable and secure way, and to set up the process of enrolling new customers into its demand response management system as it upgraded from handling thousands of big commercial and industrial loads to millions of accounts.
The result is a system that can connect customers within minutes, then download Logical Buildings’ SmartKit AI application to their computer or smartphone, “preloaded with your AMI data and all your insights,” Klatt said.
That’s quite a feat, considering that most utilities haven’t made smart meter data easy to access (although we’ve been tracking notable exceptions to this rule).
Behind the scenes of a mass-market demand response program
Logical Buildings plays a key role in aggregating Sustainable Westchester customers in Con Edison’s two primary commercial demand response programs: the Commercial System Relief Program (CSRP) and Distribution Load Relief Program (DLRP).
The CSRP is the more forgiving of the two programs, giving 21-hour advance notice to reduce load for up to four hours at a time to meet Con Edison’s systemwide peaks. The DLRP is more stringent, giving two hours of advance notice to shed load for four hours at a time to mitigate local network constraints; it also offers more lucrative payments in return.
For participating customers in Westchester County, the payments equate to $24 per kilowatt per month, or up to $120 over the program's May-to-September run period, plus “a few dollars of performance payments” of $1 per kilowatt-hour of reduction, Klatt said.
That’s more lucrative than Con Edison’s smart thermostat program for individual residential or small-commercial customers, which offers a one-time $50 rebate, plus $25 per summer for customers who let Con Edison remotely control their Wi-Fi-enabled Nest or Honeywell smart thermostats.
Con Edison also offers a program for remote-controllable window air conditioning units that can pay between $25 to $250 per summer, but only if customers fully participate throughout the summer — a challenge during the hottest days of the year.
The Sustainable Westchester program, by contrast, can pay customers for reducing electricity use below a predetermined baseline, whether it’s from turning thermostats up by a few degrees, turning off lights or choosing to run dishwashers, washing machines and other high-consumption appliances at different hours of the day.
In aggregating these customers, Logical Buildings also takes the risk that the customers may fail to follow through. “That’s a huge challenge for us,” Klatt said, as it is for other "behavioral demand response" programs that rely on customers making decisions at the moment rather than on automated load controls. “We don’t yet know with certainty how the smaller users are going to perform.”
One mitigating factor is that CSRP and DLRP don’t penalize nonperformance, unlike the “Special Case Resources” program run by state grid operator NYISO. Still, Logical Buildings will be building its portfolio of small energy users carefully, matching them with larger commercial loads it already manages and which have proven themselves to be reliable, he said.
Sustainable Westchester will undertake an ambitious marketing initiative to encourage customers to sign up and to use the data coming from their smart meters to make more informed decisions, GridRewards program director Michel Delafontaine said. That will be helpful as Con Edison moves toward time-of-use pricing to connect what customers pay for power with the shifting costs of generating and distributing it, he added.
Much of the early work on this front has been connected with valuing distributed energy resources like rooftop solar and behind-the-meter energy storage. But with the state moving to close gas-fired and nuclear power plants that supply local grid stability, the community-choice aggregator is also eager to enlist demand-side resources to provide capacity to make up for those closures.