Here’s an obscure bit of news that has some real significance: PacifiCorp, one of the largest electric utilities operating in Cascadia, has launched a program in its Utah service area to control “peak demand.” Con.WEB has the story. Bringing this kind of program to Cascadia is important not only for the economy and environment but also for security-a topic we discuss much more in Cascadia Scorecard 2005, which is set for release on February 24.
An electric power grid is a tricky thing to operate. It must always be kept in balance: power supply has to match demand in real time. Yet demand varies enormously over the hours and seasons, so power companies have to maintain a huge amount of idle generating capacity on call for the periods of peak demand. This is expensive. It’s also polluting, because “peaking plants” are almost always less-efficient, fossil-fueled ones.
In other markets where supply cannot be stockpiled and where demand varies dramatically over time, prices to consumers rise during peak periods. Few discounted airline tickets are offered during the holidays, for example, and movie theaters only offer bargain rates for matinees. The higher peak-time prices diminish demand, shifting some of it to off-peak times and simply eliminating some of it. Some people go to the matinee instead; others rent a video or read a book.
But there’s no easy mechanism for pricing electricity based on its time of use. (Although time-of-use pricing is in experimental use in some places, including a failed Puget Sound Energy test in western Washington a few years ago.)
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An alternative to raising the price to consumers is to enroll volunteer consumers of electricity in demand-response programs through which a power company can turn down those customers’ usage whenever it needs to. In exchange, those customers get cash, credits, or cheaper rates. The power company might, for example, have (limited) remote control over customers’ thermostats for air conditioning. That way, if demand threatens to overrun supply, swamping the grid and shutting off power to everyone, the utility can simply dampen demand. It doesn’t have to maintain more on-call power plants (or buy potentially expensive power from neighboring jurisdictions).
That’s what PacifiCorp is doing in Utah and expects to do in the Northwest before long. The sooner, the better, because the region’s power grid is susceptible not only to overages in demand but also to sudden underages in supply as a result of malicious acts.
More on that next week.