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Blackout 2003: a study on alternative demand structures.

On Aug. 14, New York City experienced a blackout of major proportions, part of an event that affected eight states and sections of Canada.

The Cooperative Coalition to Prevent Blackouts (the Federation of New York Housing Cooperatives and Condominiums is one of its founding members) has been warning the various state and federal agencies for years that an event such as this was bound to happen.

Who is to blame is under investigation, but it appears a single mishap paralyzed the Northeast, plunging more than 50 million people into darkness and costing billions of dollars in lost business and spoiled provisions.

Since its inception, the Coalition has been trying to educate the powers that control electricity in New York State, including the Independent Systems Operator, Public Service Commission and the New York State Energy Research and Development Agency that conservation is the only way to prevent occurrences like the one on Aug. 14.

The Coalition has attempted to hammer down the various barriers erected to prevent consumer conservation. It is a well-established fact that sub-metering can conserve electricity. In a cooperative, under current PSC rules, shareholder approval is required to install individual unit meters. I have been to many informational shareholder meetings that are corrupted by a few loud, uninformed shareholders who force the board to withdraw the proposal. If you remove the politics and let a duly elected, educated board decide the community's fate; nine out of ten times they'll go with the sub-metering proposal because it makes sense.

Unlike other utilities, the consumer is unaware of how much they spend on electricity and how the charges are calculated. Phone calls are charged by the minute, water by gallons, gas and oil is measured by consumption. Electricity is charged after the fact. To be able to read an electric bill you need a math degree! To understand the tariffs, which are the definitive charges on your electric bill, you need to be a rocket scientist!

The Coalition predicts, if the consumer understands how they are billed, they will act accordingly and conserve. To achieve this state of conservation, consumers need to be educated and billed with "real time pricing (RTP)"

In simple terms, "real time pricing" means the consumer pays different electrical costs at certain times. When electricity demand is low--at night, early in the morning and on weekends--the consumer's costs are lower. When demand high--during rush hour and weekdays--electric costs are higher.

Submetering represents a new paradigm of energy conservation, in which the time that electricity is used is more important than how much power is actually consumed.

Residential buildings may now participate in this pricing system by purchasing power from Con Edison based on an hourly cost. New York State's Public Service Commission (PSC) and Independent System Operator (ISO) endorse this concept. But RTP can only be operational if electrical meters are programmed to discern usage in short-time intervals. The Coalition has had numerous discussions with the ISO about offering incentives to the residential community, as they do with the industrial industry, to make installing time-sensitive submeters attractive.

Certain commercial consumers are paid not to consume electricity during a "curtailment event." The Coalition has demanded that these incentives be made available to the residential community. How is this accomplished?

By installing "curtailment devices" to particular electrical equipment, such as window air-conditioners. These devices automatically turn the equipment off during a "curtailment event," thus reducing the peak load of electricity. The demand is decreased and the risk of blackouts is diminished.

The benefits of being in this program are two-fold. One, you're a good citizen for reducing the amount of electricity you use during peak hours.

And two, you get paid for not using precious electricity. These devices are consumer-friendly and easy to use. They may be manually overridden if the consumer does not want the equipment turned off and chooses to pay the higher electrical cost at that particular time.

The Coalition is calling for the creation of a balanced approach to electric affordability and reliability in the residential sector. In addition to new power plants, the Coalition advocates the implementation of a demand side strategy that incorporates real time pricing and load curtailment, which is the flip side of the "demand" coin. Curtailment refers to the targeted conservation of electricity when supplies are scarce and blackouts are imminent.

New York State has entrusted the ISO to call "curtailment events" when a capacity emergency threatens such as the event we experienced on Aug. 14. Today's technologies enable energy users to automatically shut off electric--intensive equipment such as window air conditioners or building wide public space air conditioners. Customers registered with the ISO to allow automatic curtailment during these critical times and are being paid by the ISO for their capacity to conserve when blackouts are forecast.

We hope to create a multifamily curtailment infrastructure that is capable of responding to capacity and distribution power emergencies.

In order to accomplish this, the building must have advanced (interval) meters that read electric consumption in fifteen-minute cycles. The Coalition is currently seeking J-51 tax abatement eligibility to promote the implementation of this load--controlling equipment.

The residual benefits will extend far beyond cutting usage and saving money; it just might prevent future blackouts. In the very near future Fairview Owners Corp, a cooperative in Forest Hills, Queens and a number of buildings in Manhattan will be among the first buildings to implement RTP electric service and test automatic load curtailment devices.

We have every reason to believe the program will be successful and realize cost and energy savings.

If you are interested in more information on this subject or wish to investigate the installation of interval meters and introducing RTP in your cooperative you may contact the Coalition at (718) 760-7540.
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Author:Carlson, Gregory J.
Publication:Real Estate Weekly
Geographic Code:1USA
Date:Oct 29, 2003
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