Direct Testimony of Thomas M. Hildebrand - Consumer Advocate ...

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or utilities and help them automatically go into energy-saver mode. EnerNOC Inc. of Boston,
which went public in May, had 1,852 locations signed as of June 30, more than triple the number
the prior year, giving EnerNOC 756 megawatts of customer load under management, up from 234
megawatts.
One participant is Stop & Shop Supermarket Co., a unit of Netherlands supermarket giant Ahold
NV. The chain is able to cut energy use by 40 megawatts when asked, an amount of power equal
to the output of what is known as a peaker plant ”. that otherwise might be fired up to meet high
demand, through various measures.
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*I At Exelon Corp.5 Commonwealth Edison Co., Chicago, 2,173 business locations have signed up
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for utility programs this year in which they, collectively, are paid to cut use by 647 megawatts.
That compares with 22 sites totaling 25 megawatts last year. Customers decide when to cut energy
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use. not utility or grid officials, and it is often based on the market price of power they will
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Some firms shift production to times when power costs are lower or ratchet back lighting and air
conditioning.
“Customers are becoming much more energy conscious,’’ says Sharon Hillman, vice president of
marketing and environmental programs at ComEd that soon will have one of the largest “demand
response” programs outside of California.
In the Midwest and mid-Atlantic states, a slew of programs has attracted the participation of
scores of firms with the promise of rewards. Big energy users cut electricity usage by nearly 2,000
megawatts on Aug. 8, a day when supplies were stretched thin in the multistate area where power
flows are managed by PJM Interconnection LLC.
The conservation effect in California looks like the strongest since 200 1, when the state had
rolling blackouts because of power shortages and illegal market activity. In the aftermath of that
crisis, the state encouraged construction of more gas-fired power plants and renewable energy
resources. That effort has been superceded by a policy that seeks to offset market growth by
giving consumers tools to cut use, in some cases by replacing inefficient older equipment,
installing smart controllers or changing patterns of use.
The ability to change usage, typically away from high-priced or grid-stressed periods, is called
“demand response,” and it is especially important because California is introducing a new method
for pricing wholesale electricity in April 2008, capping an eight-year market-overhaul effort. The
Federal Energy Regulatory Commission, which oversees wholesale electricity markets, has urged
state officials to help users gain influence in the market, not just as consumers but as those who
can put off or eliminate consumption.
Grid officials are finding that it pays to have a variety of programs in the field. The California
Independent System Operator, which runs most transmission lines in the state and reports to
FERC, has arrangements in place that give it 2,300 megawatts worth of customer demand it can
call upon in an emergency. But it wants to develop a capability to tap an even larger universe of
companies and not just when there are emergencies but as a counterweight to high prices.
The Cal-IS0 has set up a Demand Response Lab to study the best technologies available. It would
like to have a vast cadre of energy users able to cut consumption as easily and quickly as