SACRAMENTO — The California Power Authority announced a program Tuesday to pay large industrial power users to cut their electricity use on demand — paying less than they would for actual energy and resulting in less pollution.
The program has several advantages over building new power plants, said Power Authority Chief Executive Officer Laura Doll, including that the companies won’t have to shut down completely to meet their obligation.
It can also be targeted to regions where it is difficult to send electricity because of grid congestion, such as the San Francisco Bay Area, said S. David Freeman, chairman of the Power Authority.
The program will rely on satellite technology and real-time electric meters to dim air conditioners or lights automatically when the state’s power buyers call on the companies in the programs.
“This is cheaper,” said Freeman, “and it’s quicker.”
The Power Authority estimates the program will cost $7 million this year, and will be able to call on up to 250 megawatts of energy. One megawatt is approximately enough energy to operate 750 homes.
APX, an energy scheduling company, will be paid $750,000 this year to administer the program.
As more power users are enrolled, APX’s fee will rise to about $2 million a year.
The California program is similar to ones offered in other states, except that California power traders won’t have to wait until reserves are low to call on the conservation, said John Yurkanin, APX’s chief executive officer.
When the program reaches its goal of having 1,000 megawatts to call on by next summer, it will be twice as large as any program in the country, Yurkanin said.
That’s roughly the equivalent to building 20 peaker plants, typically 50-megawatt plants that operate only when demand is the highest, he said.
Companies who sign up for the program will get a monthly reserve payment, Doll said, and next year, they’ll also get paid for the energy they save.
Enclosed shopping centers are ideal customers, Freeman said, because cooling the common areas takes a lot of energy “and the owners of shopping centers have an interest in seeing that people go into the shops. So we see a big market there.”
Other customers who would be good candidates include state offices, universities and manufacturers who can move their use to off-peak times, Yurkanin said.
The Independent System Operator, manager of much of the state’s power grid, also operates an “interruptible” program that can call on up to 1,400 megawatts of energy.
Those programs offer large business and industrial customers a lower electricity rate if they will cut their power use when the ISO’s reserves drop.
A brush fire near Gorman, Calif. Tuesday prompted the ISO to order Southern California Edison to cut 800 megawatts through the utility’s interruptible program.
The fire forced two major transmission lines to go offline, ISO officials said. They urged Southern California residents to conserve energy Tuesday evening to ease pressure on the grid in that area.