CONTRIBUTORS

Grid players stay cool while electric costs surge

Posted July 12, 2011, at 8:38 p.m.

This week, the folks who run New England’s electric grid will gather for four days in the fashionable seaside community of Westbrook, Conn., for the 10th Annual New England Power Pool Participants Summer Meeting. The region’s power generators, utilities and regulators will hobnob with executives from grid manager ISO New England and the handful of consumers staying at the lovely 100-room resort on the sea.

Between receptions and banquets, these leaders will play golf and tennis and discuss the state of our electric grid. They may even discuss what can be done to reduce New England’s electric costs, among the highest in the nation.

With few exceptions, these men and women will be largely indifferent to the outdoor temperature, predicted to be between 80 and 90 degrees in fairly sunny weather. Their hotel, like virtually every other modern building, is fully air-conditioned. As the United States Energy Information Administration has noted, air conditioning is the single largest contributor to the growth of peak electricity demand. New England is no exception.

Last summer, New England’s electricity demand peaked at 27,300 megawatts, meaning we would need to run more than 27 mammoth gigawatt-scale power plants — each larger than any existing in New England today — full-out to meet that need.

The last 6,000 megawatts of electric demand to appear in New England are weather-sensitive, driven nearly entirely by air conditioning. When it hits 85 degrees in Boston or Hartford, electric demand reaches about 21,000 megawatts. At 95 degrees, electric demand tops out at 24,000 megawatts. When the temperature reaches 99 degrees for two consecutive days, electric demand exceeds 27,000 megawatts.

This is costly, because every additional power plant we need to run is more expensive than the last. Worse, this much electric demand can place the grid in peril if the wrong combination of power plants is unavailable or if lightning knocks a key transmission line out.

This peril is real.

On a hot June afternoon in 2010, 2,000 megawatts of power plants which had committed to run that day suddenly became unavailable. Costlier backup power plants came on, driving the price of a kilowatt-hour to more than 90 cents — twenty times higher than the average price. Relief came only when ISO-NE called for support for the grid through a program called Demand Response.

Larger consumers interrupted their consumption within one half hour of the grid operator’s call. These Demand Response participants are hospitals, stores, office buildings, colleges and schools, factories and large manufacturers capable of producing both steam and electricity efficiently through co-generation. The result was nearly instantaneous: the grid stabilized and the price of power paid by every New England consumer fell from over 90 cents per kilowatt hour to less than 6 cents. Consumers saved millions of dollars.

The consumers who interrupted when ISO-NE called were paid to do so, but they were paid far less than the generators charging 90 cents per kilowatt hour. They were paid for their trouble because they stopped their regular business, and some shared their excess power to help their neighbors.

For example, without paper mills in Maine decreasing their consumption and sending their generation out onto the grid during this crisis, electricity in New England would have remained prohibitively expensive far longer.

This is but one example of how Demand Response stabilizes the grid at a lower cost than expensive peaking generation. Mills have given the grid this Yankee common-sense support for five years, although the grid operator has seemed not to want the help at times. In fact, one of the topics being discussed in the lovely, air-conditioned meeting rooms of the NEPOOL Participants in Connecticut this week is ISO-NE’s proposal to eliminate our best Demand Response assets, these large mills able to both reduce their consumption and use their internal generation to help the grid.

Perhaps those high-priced generators who populate NEPOOL cocktail parties and banquets don’t like the way these cost-effective Demand Response providers can lower the price of electricity. If the ISO-NE proposal is approved, we will lose 300 megawatts of Demand Response capability. If this happens, the next time the grid is stressed, the price may again rise to 90 cents per kilowatt hour. And it will stay there, at least until the sun sets and our insatiable demand for air conditioning melts into the night.

Let’s hope cooler heads prevail in Connecticut and at ISO-NE. Perhaps it would be useful to start by remembering what it takes to keep all of New England’s heads cooler and our electricity bills a bit lower.

Sen. Richard Rosen of Bucksport represents District 31 in the Maine Senate and is chairman of the Appropriations and Financial Affairs Committee.

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