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Getting More Demand Response From the Small Business Customer

Mark S. MartinezManager, DSM Program DevelopmentSouthern California EdisonPLMA Fall ConferenceNovember 7-8, 2006New York, NY

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Why Is This Topic Important?

Demand response (DR) will become a powerful resource for demand side management

SCE (and the other IOUs) is investing millions in incentives, awareness, and outreach/education

Few programs in the small commercial sector have deployed DR effectively

Research is still needed to study small biz needs and effective solutions

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Historical Peaks at CAISO

Year    Date   Area Load

2005 Jul. 45,431

2004 Sep. 45,597

2003 Jul. 42,581

2002* Jul. 42,441

2001 Aug. 41,419

2000 Aug. 45,494

1999 Jul. 45,884

1998 Aug. 45,811

*ISO peak load reduced after SMUD became their own Control Area.

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Historical Peaks at SCE

Year  Date Area Load Temp.

2005 Jul. 21 21,934 89º F

2004 Sep. 10 20,762 88º F

2003 Sep. 5 20,136 93º F

2002 Sep. 3 18,821 92º F

2001 Aug. 7 17,889 85º F

2000 Aug. 16 19,757 93º F

1999 Jul. 13 19,122 80º F

1998 Aug. 31 19,935 98º F

1997 Sep. 4 19,118 98º F

1996 Aug. 14 18,207 96º F

D R A F T 6

SCE DR program portfolio

Program Est. Peak Load Reduction (MW) September 2006

I-6 580.7

Base Interruptible (BIP) 83.5

SDP – Residential 364

SDP – Commercial 47.6

OBMC 10

AP-I 34.7

Demand Bidding Program (DBP)

14.8

Critical Peak Pricing (CPP-VCD & CPP-GCCD)

3.0

California Demand Reserves Partnership

28.4

Total 1,166.0 MW

Reliability

Price Response

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SCE 2006 DR Budget ($mil)

Program/Activities Expense Incentives

Reliability Programs (I-6,BIP, AP-I, SDP)

$19.8 $115.8*

Price Response

(DBP,CPP,CPA-DRP)

$1.7 0.3**

Customer Awareness, Education & Outreach

$11.1 $6.0 (TA&TI)

Measurement & Evaluation, DR systems, PCT Pilot

$5.8 -

Total Budget $38.4 $122.1

*Estimated

**2006 DBP event performance

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CASIO Friday, July 21, 2006

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CASIO Monday, July 24, 2006

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SCE System - July 24, 2006

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Demand Response reduces SCE peak to avoid Stage 3 event

1pm Stage 2

10:00am Stage 1

660MW of load shed from I-6 and BIP for 3 hour duration

5:33pmLoad Restored

6:14pm Stage 2 cancelled

9:00pm Stage 1& Warning cancelled

7:30am Warning

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I-6 Performance on peak day

I-6 Performance on July 24, 2006

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Today’s Presentation Topics

1. Small business enabling technology

2. Critical peak demand savings potential

3. Participant reactions/acceptance re: technology

4. Best candidates and businesses —if any

5. Research project results and cost effectiveness

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Demand Response

Non-EE/DR

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Demand Response DefinedEnergy Efficiency (Blue) reduces load all the time

Demand Response (Red) reduces just when we need it

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Distribution of Commercial Buildings within SCE*

Small Office 17% Restaurant 6.3% Retail 26% Lodging 1.2% Grocery 1.6%

Large Office 1.3% College 0.8% School 13.1% Warehouse 4.7% Health 1.4% Misc 26%

* SCE 1997 Commercial End Use Survey

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Small Customers Can Make a Big Difference

Residential – over 4 million 50% saturation of central ACs, average is about 4 tons

Small Commercial – over 500,000 75% saturation of central ACs, average each is about 4

tons, with 1.5 unit per service account This represents over 10 million tons of air conditioning on a

peak day from residential and small business At 0.5 kW/ton, that’s 5,000 MW market potential (currently

only 400 MW enrolled, or 8%)

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Customer AC Equipment

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Controllable thermostat – most common DR application

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Two-Way Paging Communications

3) BroadcastCurtailment

MessageWireless

Fan Coil Unit

Carrier EMiThermostat

Silicon Energy REM

SCEOperator

2) Curtailment Message

Pager

Emi UIOB Standard WebBrowser

1) CurtailmentRequest

4) Unique AcknowledgmentWireless

[A user override will generatea real-time message from

the EMi back to the server]

5) Acknowledgments from all EMi’s

6) Verification ofLoad Reductionand Override

Notices

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Example of 4 degree curtailment

Test Day HVAC Load ProfilePanda Management, Ontario CA

July 9th, 2002 (3-5pm, 4F Setback)

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What are the Small Commercial “appliances”?

Most small commercial customers have packaged AC systems, averaging 2 - 10 tons

Other end uses include lighting, office equipment, food prep or storage, water heaters, and business-specific plug loads

Overhead lighting circuits deemed best additional option based connected kW

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DR EMS Study Approach

Study Approach Installed controllers at 21 sites in 2004 and 2005 Intensively metered 10 sites to assess impacts Comparisons of “most similar” days, controlled and uncontrolled, at

the same site for impact analysis

Constraints Required to recruit participants from a random sample

• All CA critical peak pricing class “V” (4-hr notice) participants

• Could not recruit “best” candidates Did not assess on quantitative level more expanded installation

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Small C/I EMS System

Communications device

- External switch (this project)

- Dial-up modem (this project)

- Ethernet card for broadband, or

- Automated meter infrastructure (AMI)

Analog inputs (4)

- Temperature (ambient, freezer, cases)

- Power, if CTs

Digital inputs (4)

- Switches, such as to initiate DR

- Power, if KYZ pulses

Power and control relays

Computerized decision-making and data acquisition system

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Interoperability with all end uses

Controlled Loads Lighting Commercial packaged air conditioner Walk-in cooler Ice maker Walk-in freezer Water heater Reach-in cooler Anti-sweat heater

Smart Control Logic Overall: Manage demand to a defined maximum during the period, subject to

temperature or other over-rides. Not offset. Can assign up to 16 priority levels for control Practices coincident load management Can link relay instruction logic (e.g. if #3 is closed, #5 must be open)

Protection from overcontrol Can set maximum “off” times and minimum “on” (or run) times to each relay Can set maximum or and minimum temperature overrides for A.C. or refrigeration All relays fail closed, e.g. uncontrolled

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EMS Control SchemaWireless signal receiver & switch, or modem or internet connection

Dencor controller

Distribution panel, including main service with 3 CTsand relay for dedicated plug circuit & walk-in

Lighting control panel (light fixtures not shown)

Walk-in cooler with thermostat monitor

Novelty cooler or other controllable plug load on dedicated circuit

One-or two-stage thermostats for rooftop air conditioners

Water heater with two elements

New control wiringNew monitor wiring

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Findings – Demand Savings

8.5 kW average savings over seven 2-hr events 16% reduction on average

11 kW savings on the one hot (mid-90s) control day 22% reduction due to AC reductions

“Rebound” was negligible Less than 0.5% of baseline demand

Savings was consistently 14% to 31% of uncontrolled demand – integrated end use demand limiting

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Findings – Demand Savings

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Findings – Demand Savings

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Findings – Demand Savings

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Findings – Customer Acceptance of EMS

RECRUITMENTNeeded major education on the concept of demand response even though recruits

were already critical peak pricing pilot volunteers (SPP)

Needed major education on how technology would reduce blackouts and their power bill (without affecting business ops)

After education, majority (not all) accepted the free offer – value proposition

REACTIONS TO CONTROL20 / 21 customers participated through end of pilot (95%)

Two customers had comfort issues that needed to be addressed

Most were unaware of CPP events and technology activation

No product loss or service/utility depreciation

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Findings – Cost Projected Costs:

Actual pilot costs are not relevant to future program costs

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Findings – Cost Technical Variables Affecting Installed Cost:

Hardware purchase price Distance between equipment Number of items connected Accessibility for communications

Paging signal reception Telephone or Ethernet wire runs

Ability to do pre-screening studies Utility meter type Obstructions / foot traffic / high ceilings kW of load controlled was NOT a dominant cost variable.

Mfr has reported installation costs as low as $1,600 /site in non-DR arena

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Findings – Cost Effectiveness Estimate $450 /kW installed cost, based on

Average 75 kW customer 20% savings $7,000 cost per system

Improve over all cost-effectiveness by: Requiring ~50 kW+ of controlled load Targeting most suitable facility types

Convenience stores Fast food Offices with large number of packaged units (more than ~5) Retail and Commercial Chains Facilities with diverse equipment sets

Installing in volume Purchasing in volume Limiting geographical installation area

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Pilot Program Observations

Can such a technology cost-effectively reduce demand in the small commercial segment?

QUALIFIED YES (depends on the program offer)

Program design keys to success: Target most suitable applicants Customer education to enhance savings Install in volume with repeatable footprints Allow the installation teams to develop experience

with applications and technology

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Summary

The small-medium non-residential sector has vast untapped DR potential – is it cost effective?

Small EMS may be a cost-effective tool to capture about 20% of that market’s potential DR kW

Expected savings/site is about 20% of peak period demand with AC, lighting, and refrigeration

The most cost-effective targets are chains and high energy intensity facilities with diverse loads