Power System Engineering - Demand Response Studies

Power System Engineering, Inc. (PSE)’s expertise crosses the multiple disciplines of energy economics, rate making, automatic meter reading (AMR), advanced metering infrastructure (AMI), load management technology, and communications.

Peak reduction through direct load control is a well established demand-side resource for many G&Ts and their member systems. Many of these programs were started in the 1980s, and potential annual peak reductions are now reaching levels of 15 to 20%. Other G&Ts, however, have steadfastly rejected this demand-side approach and instead pursued additional peaking generation to cover load growth.

Load management through direct load control is now experiencing a renaissance of interest among utilities with multiple drivers:

The transition of generating utilities from decades of excess capacity to shortages in many areas.
Strong opposition to a new generation based on both economic and environmental arguments.
Strong interest among utilities in AMI installations that provide some of the communications systems required for direct load control.
Mandates by federal and state regulators to explore demand response potential.
Evolution of power markets toward hourly pricing that can create new value metrics for load modification.
High failure rates among older communication technologies and the availability of new alternatives.


Some of the questions a load management assessment can answer include:

Does it make sense to continue the present load management program?
What level of module failure presently exists? Does it make economic sense to invest capital dollars to repair the failed sites? Does it make economic sense to develop a maintenance program to keep the modules working at a level of 95% or greater?
Does it make economic sense to add new applications such as air conditioners to a system that may have mostly water heaters or vice versa?
What are the costs and associated benefits of retiring the one-way load management technology and replacing it with a two-way system? Is it best to do so in conjunction with an AMR/AMI deployment with the distribution business unit?
What are the in-home capabilities of the vendor’s products in regards to new demand response technology for a critical peak pricing (CPP) and/or smart thermostat programs?
What load shifting benefits can be expected for residential CPP and/or smart thermostat programs?
Given the utility’s present communications infrastructure, how can towers, microwave networks, backhaul of substation applications, etc., best be leveraged for a possible migration for a new two-way demand response technology?


PSE has been very active in load management studies for G&Ts and their members over the past several years and offers a variety of services in testing the economic feasibility of direct load control including:

G&T load shape analysis to identify the potential peak reductions from different load control strategies.
End use load shape analysis to optimize control of specific end uses and maximize peak reductions.
Avoided cost analyses to determine the economic value of peak reductions based on avoided construction, displaced seasonal contract purchases, and displaced purchases in hourly markets.
Costing and evaluation of alternative communication technologies.
Receiver failure and replacement analysis.
Analysis of net benefits for the G&T, their members, and program participants under alternative program designs.

In addition to direct load control, CPP provides an attractive replacement or supplement to an effective demand response program. PSE is now actively engaged in designing and implementing CPP pilot programs to test consumer response to specific pricing and marketing strategies. Important variants include the communication systems used and the mix of reliance on utility control on a pre-agreed basis or customer control in response to CPP signals.