In a California pilot program, utilities try to cut peak electricity demand
The Orange County Register, Calif. --Sep. 8
Sep. 8--At the historic Parasol restaurant on Seal Beach Boulevard, owner Roy Hall and his staff keep an eye on the glowing orb behind the cash register. When the grapefruit-size device changes color from turquoise blue to lime green, they start turning off lights and unneeded kitchen equipment.
"It's unique," says Hall of the orb, which he's had since late
July. "I'm looking around to see what I can turn off."
While Americans are accustomed to paying higher telephone rates at certain
times of day, most still pay a flat rate for electricity, no matter when it's
used. That means consumers don't get a price signal to turn off appliances when
power demand is at its highest, typically on summer weekday afternoons.
Because power can't be stored and must be generated in line with demand, the
oldest, most inefficient plants are pressed into service on the hottest
afternoons to keep air-conditioners humming. This inefficiency, as well as
competition among utilities for scarce power, drives up the wholesale price.
The biggest power customers, such as heavy industry, already pay variable
electricity rates based on the time of day. Now, state officials are looking at
ways to encourage residential and small-business customers to shift power usage
to low-demand periods, when supply is plentiful and relatively cheap. The orbs
are one aspect of the experiment.
In the test, Southern California Edison and San Diego Gas & Electric have
installed the orbs at about 33 small businesses and 30 homes, respectively.
These customers have agreed to participate because they get a 10 percent to 20
percent discount on their electricity usage during off-peak hours, from 6 p.m.
to 12 noon.
On very hot days, however, the orb sometimes flashes red. During these
"critical-peak" periods, the test customers pay four or five times
their normal rate, or as much as 50 to 80 cents per kilowatt-hour.
Ester Byun, general manager of Royal Palm Corp., a manufacturer of socks in
Fullerton, keeps the orb on top of an office computer. When it flashes red, she
turns off the air conditioning and anything else that's not absolutely
necessary.
"I totally keep an eye on it every single time I'm in the office,"
Byun said.
Before the orbs were put into use, test customers were notified of
critical-peak periods by telephone. But telephone calls can be missed or go into
voice mail, Byun said. "Looking at the orb is much better," she said.
After the test wraps up in October, utility and state officials will analyze
the results and decide how to proceed, said Mark Wallenrod, Edison's manager of
tariff programs and services.
One obstacle to so-called "time-of-use" electricity rates is the
high cost of the special meters that must be installed at homes or businesses
that participate, Wallenrod said. They cost $500 to $700 each, compared with
$100 for a standard, flat-rate meter, he said.
However, Wallenrod hopes the cost of such meters would fall considerably if
they were put into broader usage.
THE AMBIENT ORB: The orbs, which retail for about $150, are a product of
Ambient Devices Inc. of Cambridge, Mass., which first marketed the globes as a
way to track fluctuations in the stock market. However, they can be programmed
for other uses, such as indicating changes in power rates.
The orbs are essentially gussied-up paging receivers, said Southern
California Edison's Mark Wallenrod. They receive wireless signals from a control
center, telling them when to change color.
Mark Martinez, a manager at Edison who works on the time-of-use pilot
project, learned of the orbs while reading a catalog during an airplane trip. He
thought they would be a good way to test consumers' responses to visual
indicators of changes in electricity pricing. He arranged a meeting with Ambient
Devices and got the project rolling. The orbs were installed in July at homes
and businesses participating in the time-of-use metering test.
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