With more than 700,000 electric and 300,000 gas customers, CPS Energy in San Antonio, Texas, is one of the largest municipal utilities in the United States. While CPS customers enjoy some of the lowest electricity rates in the country, the city of San Antonio and CPS Energy, under the direction of CEO Doyle Beneby, have set aggressive goals for energy efficiency and diversification of their generation portfolio.

The objective is not only to prepare the city for continued growth (currently the seventh-largest city in the country), but also to position San Antonio as a leader in the new energy economy and bring more high-paying, high-tech jobs to the river city. CPS Energy recognizes that to be sustainable it must balance financial viability, commitment to the environment and social responsibility to the city.

CPS Energy’s Save for Tomorrow Energy Plan, as part of San Antonio’s Vision 2020 plan, sets aggressive goals for reducing the city’s overall energy consumption by more than 770 megawatts (MW) by 2020. As part of CPS Energy’s agreement with Consert to help provide the reduction of 250 MW of peak demand and a recent agreement with OCI for a 400 MW solar farm, CPS Energy is well on its way toward its goal.

Sizing Up the Opportunity
Everything is bigger in Texas, and anyone who has spent a summer in the Lone Star State knows this is particularly true when it comes to the temperature. The Electric Reliability Council of Texas (ERCOT) has found that residential A/C load represents more than half of the total demand during the peak months of May through August (see Figure 1). Considering recent resource adequacy challenges, it is a prime opportunity to address the residential load.

In February 2012, ERCOT CEO Trip Doggett testified before the Texas House Committee on State Affairs, stating, “If we have the same summer as last summer, we had to have conservation [last summer] and everyone made a tremendous difference during those peaks on the hot summer days of last August. We’d have to have that, plus some [more], to survive this summer without rotating outages.”1

Reserve margins for electricity in Texas have declined over the past two years, from 17 to 13.75 percent, and are forecasted to further reduce this summer with the expectation of long stretches of hot, dry weather.2 A portion of the shortfall may actually be attributed to good news. Texas has benefited from growth due to its healthy economy and increasing demand for electricity. When combined with postponed generation projects, deregulation and the low cost of electricity, construction of new generation facilities to meet increased demand is practically and economically unfeasible in the near term, leaving the state in a proverbial pickle.

Implementing a Virtual Peak Plant
To reduce peak load, overcome the intermittent nature of renewable sources and address conservation goals, CPS Energy engaged Consert Inc. to provide the Consert Virtual Peak PlantTM (VPP) solution to 140,000 residential and light commercial facilities (with appliances under 50 amps) to achieve a savings of approximately 250 MW. As part of the agreement, Consert relocated its headquarters from Raleigh, N.C., to San Antonio.

“CPS Energy’s pursuit of diverse resources to generate electricity is what will allow us to keep our customers’ bills among the lowest of major cities in the U.S.,” states Doyle Beneby, CEO of CPS Energy. “By partnering with Consert, we’re adding a Virtual Peak Plant to our resources – helping our customers control how energy is used in their homes and reducing their bills. After all, what’s cheaper or cleaner than demand reduction as a generation resource?”

The Virtual Peak Plant
The Consert Virtual Peak PlantTM provides a real-time, intelligent load management system that creates measurable and verifiable capacity, dispatchable energy and cost savings for utilities. The solution facilitates a mutually beneficial relationship between the utility and its customer.

The benefits to the consumer include a home area network (HAN), which is usually provided without charge by the utility to qualified customers and graphically presents real-time information about their energy consumption through a web portal and allows granular control over major energy-consuming appliances (HVAC, water heater and pool pump). Management of these appliances typically results in a 15 to 20 percent savings on customers’ energy use without any loss of comfort.

The HAN includes a device controller (DC) for measurement of the HVAC and measurement and control of the water heater, pool pump and electric vehicle charger. The HVAC and water heater alone can represent 40 to 60 percent of residential electric consumption during peak demand hours. The DC on the HVAC communicates via ZigBee to the thermostat, which, along with the DCs on other devices, communicates with a gateway under the meter glass. Data is collected and sent over Verizon’s secure, private 3G wireless network to Consert’s data center, and presented via a web portal to the utility-generation desk. Figure 2 shows an infographic of the Virtual Peak PlantTM.

The utility benefits by having access to high-electrical-use appliances in order to initiate conservation or curtailment events to shed load. Multiplied by hundreds or thousands of consumers, the result is actionable load resources for a utility such as CPS Energy. Installed capital expenditure on a per-kilowatt basis is very competitive with traditional supply-side options.

Pilot projects at other electric utilities produced data verified by the Lower Colorado River Authority (LCRA) showing that Consert’s VPP controlled 57 percent of a home’s load (HVAC and water heater only) during peak demand times (see Figure 3). This equates to approximately 1 MW of available load for every 380 participating homes. Extended across 140,000 homes for CPS Energy, Consert’s VPP will provide significant resources at critical times.

According to James Rose, former Fayetteville Public Works Commission (FPWC) chief administrative officer, “With Consert, we have created another source of renewable, clean energy solutions for our community. Consert’s technology gives energy conservation the attributes of generation and helps FPWC meet state-mandated renewables and energy-efficiency requirements.”

During a conservation event, the utility may selectively turn off water heaters to curtail the desired load in real time or allow the thermostat to drift the temperature up (or down during the winter) by four degrees or for the length of the conservation event, whichever occurs first (see Figure 4).

Additional LCRA findings showed that for the first hour, more than 90 percent of participants did not notice a change in temperature and therefore did not opt out of the event. By balancing the desired load curtailment with the available load resources, utilities can maximize the duration, and ultimately the predictability, of total energy savings from the event.

During the hot Texas summer months, managing just 100 hours per year can have a big impact, as demonstrated by the ERCOT price duration curve (see Figure 5).

“Our tests on Consert’s technology during the winter emergency load events showed the enormous potential of a load management program benefiting both consumers and utilities,” said Mark Rose, CEO of Bluebonnet Electric Cooperative, “Consert’s system reduced critical load as requested and provided real-time, measurable and verifiable results. When used on a broader scale, this technology will be another way for Texas utilities to address, and hopefully avoid, future outage scenarios.”

In addition to providing a fully integrated, intelligent load management solution that works to the advantage of the utility and its customers, Consert’s VPP provides improved forecasting and capacity management as well as more efficient AMI/AMR functions, including outage and tamper detection information and remote meter connects and disconnects.

The system also allows utilities to implement time-of-use or other alternative pricing programs, as well as track and monetize load reductions as renewable energy and carbon credits, producing potential future revenue streams.

Can Controllable Customers be Happy Customers?
Utilizing Consert’s VPP provides CPS Energy and its customers a simple and reliable way to reduce energy consumption – mostly by eliminating loads that would have been otherwise wasted through traditional means.

Independent surveys of the program, sponsored by LCRA, demonstrated overwhelmingly positive feedback from participating customers, with an overall satisfaction rating of 92 percent (see Figure 6).

“Satisfaction among our members was extremely high,” says Don Bowman, manager of engineering at Wake Electric Membership Corporation, “At the same time, the utility was able to collect more data more quickly than ever before. It’s the kind of information we used to get only once a month by sending out meter readers.”

Surprisingly, most participants in the LCRA survey also expressed a willingness to participate in more frequent or longer-duration conservation events, which may be attributed to the sense of empowerment through easy access to energy consumption information and the ability to opt out if needed.

Conclusion
CPS Energy began implementation of Consert’s VPP with 24,000 installations planned for 2012, followed by a ramp-up to achieve 140,000 installations. Once all installations are complete, CPS Energy will have more than 250 MW of actionable load at its disposal during peak seasons (with a conservative estimate of approximately 2 kW of available load per home) as part of a diversified portfolio. Even in Texas, that’s a big deal.

1 Source: WFAA.com, “Conservation’s the word to avoid summer blackouts says ERCOT” by Teresa Woodard, posted March 23, 2012.
2 Source: ERCOT.com, “ERCOT 10-year outlook indicates need for additional generation” posted December 1, 2011
3 Post Summer Curtailment Participant Study Results – LCRA and Bluebonnet Electric Cooperative, October 2011. 25 surveys conducted based upon the total population of 100 pilot participants places the confidence / precision interval of this survey at the 90/15 level, providing 90% confidence that the responses are within a ±15% error range. This level represents a high level of reliability that the information provided is representative of the pilot population as a whole.