PG&E Customers Save Money by Sparing California’s Power Grid

By Jonathan Marshall

As record heat bakes California, driving up energy demand for air conditioning, PG&E has enjoyed tremendous cooperation from customers who dial back their own consumption of electricity. Their efforts help prevent power outages, lower costs for everyone, and spare the environment by reducing the need for PG&E to buy fossil-fueled generation at peak prices.

Chico State saves $6,000 to $8,000 a year through Peak Day Pricing, a PG&E program that helps curb excess grid demand.

Nearly a quarter million customers take part in PG&E’s “demand response” programs, which offer incentives for demand reduction on special days, like last Friday and today, when system loads become unusually high. These programs, including the fast-growing residential SmartRate™ program, have the combined potential to cut peak demand by about 670 megawatts (MW), the size of a large power plant.

PG&E’s agricultural, business and government customers, large and small, have for several years been doing their part to save energy — and money — with Peak Day Pricing (PDP), a business variant of the SmartRate program. PDP customers pay extra on nine to 15 “event days” each year, during hours of peak demand from 2 p.m. to 6 p.m. In return, they enjoy credits for electricity use at all other times from May 1 through October 31. Simply by conserving energy a few hours a year, they can save serious money and earn good karma at the same time.

Businesses large and small cooperate

Participants in PG&E’s PDP program number about 1,600 large commercial and industrial customers and nearly 4,500 small and medium-sized business and agricultural customers. Together those businesses cut demand by an estimated 40 MW on Friday and again today, almost the size of one gas-fired “peaker” plant. That’s about equal to the estimated demand reduction also achieved by the more than 100,000 residential customers participating in the SmartRate program.

“Demand reductions like these help protect customers served by California’s electric grid from possible service disruptions and potentially unsafe operating conditions during especially hot weather,” said Steve Berberich, president of the California Independent System Operator Corporation, which manages much of the state’s transmission infrastructure. “It’s a great example of how cooperation helps California maintain reliable service at an affordable cost.”

Participation in Peak Day Pricing means that PG&E doesn't have to operate an additional "peaker" plant to serve power demands on very hot days.

In Placer County, the City of Lincoln’s wastewater treatment plant saves $20,000 to $30,000 a year by participating in the PDP program, simply by timing its operation to avoid running its energy-intensive tertiary treatment facility during peak hours on event days. The plant, which supplies treated water to irrigate alfalfa crops, is often able to store partially treated wastewater in its tanks for later processing.

“It’s fairly easy to manage our facility to save money,” says Stephen Gittings, chief plant operator. “To shut down the tertiary treatment takes only an hour, so it’s not difficult. It takes only two to three hours to come back online when temperatures drop back down.”

California State University at Chico has saved $6,000 to $8,000 a year through the PDP program since 2010. When the campus receives notice of an event day, it programs its energy management system to reduce power to its cooling systems (fans and chillers) by about 25 percent for a few hours. The facilities manager also sends out a notice to employees to cut unnecessary plug loads (like computers) and lighting.

“People don’t really notice the changes,” said Mike Bates, assistant director for capital projects at the university. “And it’s so simple there’s no reason not to do it.”

An opportunity to reduce load, save money

Many business owners see event days not as a burden but as an opportunity or a welcome challenge. Ruthe West, general manager of historic Union Cemetery and Crematorium in Bakersfield, saves money by shutting down some computers, water pumping for landscaping irrigation, and crematorium operations during the 2 p.m. to 6 p.m. window.

“We look forward to the event days every summer, because we view them as an opportunity for us to reduce our electric load and our bill,” West said. “PG&E has a great program in Peak Day Pricing, and we’re very pleased with it.”

Salinas-based American Growers Cooling, which stores, cools, and ships fresh produce, sees many benefits beyond the $23,000 it saved in one year from the program.

Historic Union Cemetery in Bakersfield sees Peak Day Pricing as an opportunity.

Said Kris Gavin, the company’s technical services and sustainability manager, “Participating is not only beneficial by reducing our energy use and costs; it benefits statewide energy conservation objectives. By partnering with PG&E to reduce energy use during peak demand events, we are allowing PG&E to make cleaner energy choices, which is much better for the environment. Peak Day Pricing impacts our operations for just a few hours, and it’s just a few day a year, so it becomes second nature, saving us a significant amount of money while allowing us to participate in promoting cleaner energy choices.”

Note: PG&E practices what it preaches. Here at headquarters, our facilities manager reminds us that “At PG&E, we have a unique obligation to make sure that we follow curtailment guidelines in our own offices and buildings. PG&E employees have a standing tradition of working long hours and sacrificing their personal comfort when necessary during emergencies, and electric curtailments are no different.”

We are reminded to turn off all unnecessary lighting, office equipment and kitchen appliances; to set thermostats to 78 degrees; and to disconnect phone and other chargers for the duration of the event. That’s good advice for any business.

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