When the temperatures rise and the power stays on, thank Connecticut businesses who have agreed to cut operations whenever necessary.
Businesses in Connecticut lead the region in ISO New England's increasingly important reliance on demand-side management techniques that help keep the electricity flowing while keeping rates down.
The process is simple; when the state and regional power grid approaches maximum generating capacity, businesses in the program shut down. That decreases the demand for power and the risk of brownouts and blackouts is reduced. It also keeps ISO New England from having to add costly high-peak energy supply. And, long-term, it reduces the need for extra system capacity through the construction of power plants.
For the companies, participation isn't an act of altruism. It's good business. Companies participating in these programs get paid about $25,000 to $100,000 each year.
"If there is a brownout or a blackout, we are down anyhow," said Bob Blanchard, plant manager for Gilman Brothers Co. The Gilman-based firm manufactures foam board products and participates in demand side management programs.
While ISO New England has used demand side management since 2006, it wasn't until June 1 and the creation of the forward capacity market that these demand resources became equal to the generating resources in the power grid.
"The program has been quite successful," said Ellen Foley, ISO New England spokeswoman. "We now are one of the leaders in the country in demand side management."
Managing demand is particularly important in the hot summer months when energy demand reaches its peak as air conditioners run full tilt and machines and appliances need more electricity to operate in high temperatures. In the first week of July — with temperatures closing in on 100 degrees — energy use totaled more than 27,000 megawatts per day, or 87 percent of ISO New England's generating capacity.
For the entire New England grid, ISO has 31,200 megawatts in generating electricity supply available and 7,900 megawatts targeted for Connecticut.
When a crisis hits and the system needs to reduce demand immediately, ISO can call on nearly 2,300 megawatts in demand resources to reduce strain on the grid. One third of that is provided by Connecticut companies who have signaled a willingness to shut down.
More Connecticut companies participate in these demand crisis response programs than any other state in New England. Businesses here provide 765 total megawatts of demand response, compared to 650 in Massachusetts, 535 in Maine, 135 in Rhode Island, 110 in New Hampshire and 100 in Vermont.
The last crisis — and the first one since demand management's importance was upgraded — came June 24 when New England was using 23,900 megawatts of power and several generators went down across the grid, reducing the operating capacity by 1,800 megawatts.
While the power grid had enough capacity to meet real-time demand, the surplus supply was gone. ISO New England called on 12 companies throughout the system to reduce overall demand by 670 megawatts.
The demand was reduced, and the power stayed on. The reduction was equal to the power demand of 670,000 homes for one hour.
"The market worked as it should have on June 24," Foley said.
Among the Connecticut companies responding that day were Gilman Brothers; Futuramik Industries, Inc., in Hartford; Crown Risdon, Inc. in Watertown; Okay Industries in New Britain; Pegasus Manufacturing, Inc. in Middletown; Keystone Paper & Box Co., Inc. in South Windsor and the Town of Vernon's Water & Wastewater Treatment Facility.
At Gilman, for example, once the call went out, the manufacturer had 30 minutes to reduce its demand by 520 kilowatt hours. On June 24, the plant shut down from 2:30-5:15 p.m.
"We are typically running around the clock here at our facility, so it definitely puts us behind when we are down," said Cyrus Gilman, company vice president.
The local businesses are paid for their participation in the shut down, depending on how much they reduce their demand and which management company they contract with.
Large demand side management companies such as Boston-based EnerNoc and Georgia-based Comverge partner with clients such as Gilman Brothers to create a pool of power reduction potential.
EnerNOC assesses each client's facilities to determine how much power can be reduced in a crisis, and then will call on its entire list of clients to cut back on demand whenever the utility needs it.
Starting on June 1, Comverge and EnerNOC are paid $4.25 by ISO New England for every kilowatt hour they provide every month in potential demand side management. They are paid regardless of whether there is a crisis, as long as they have the ability to manage demand. If there is a crisis, and the companies fail to meet the necessary demand reduction, they are penalized, Foley said.
"We feel pretty good about the value we are giving to the ratepayers right now," said Gregg Dixon, EnerNOC senior vice president of marketing. "The alternative is to build more power plants to meet demand."
Demand side management is a growing business, said Chris Savastano, Comverge senior director of C+I solutions. Comverge's revenues in the market are up 120 percent over last year, and the company now works nationwide with more than 500 utilities and 2,100 commercial customers.
Companies such as EnerNOC and Comverge always are seeking new clients to grow their total assets to the power grid.
For Connecticut businesses such as Gilman Brothers, the benefit comes in two forms.
First, in the demand management company's assessment of the business's facilities, EnerNOC or Comverge will make recommendations to increase energy efficiencies, saving the business on its bills.
Secondly, when a crisis hits, the demand management company will pay the business to shut down its operations and reduce overall grid demand. The local businesses aren't required to shut down, but they are paid to do so, Dixon said.
The payment varies for each business, depending on how much demand reduction is provided, how frequently it is provided and other factors. Millipore, based in Eastern Massachusetts, receives approximately $25,000 each year for providing 1.3 megawatts of demand reduction. Western Connecticut State University in Danbury receives about $100,000 in demand response payments for its 2,200 kilowatts of reduced electricity usage.
Western Connecticut State University also realizes $715,000 in energy efficiency savings through programs introduced by EnerNOC.
The payment made by EnerNOC to Gilman Brothers for its June 24 shutdown wasn't enough to completely offset the losses from its production being offline for nearly three hours, but the margins are close enough where participation is worthwhile, Blanchard said.
"I'm glad we could participate in this," Blanchard said. "If we have to lose a few dollars so our neighbors can keep the power on, so be it. There's no need for all of us going down."
For local businesses not wanting to sign on with companies such as EnerNOC or Comverge, ISO New England has a much smaller program where New England businesses can enroll directly with the corporation.
Under that program where companies can sign up at any time, the reimbursement rate for shutdowns is based upon the current cost per megawatt hour when the demand reduction is ordered. ISO New England has 63 megawatts of potential reduction in that program.
Technicians in the ISO New England control room monitor the region's power usage minute by minute.