Keeping Costs Down

On Monday, November 5, 2001 the New York State Public Service Commission conducted a workshop with representatives of the public and private energy and real estate communities. The discussion concerned the necessity of implementing electrical load-shedding and time-sensitive pricing in the New York City residential sector, especially the cooperative and condominium markets. This workshop was a continuation of a series of discussions between cooperative leaders, New York State officials, and energy experts to develop ways for the cooperative and condominium community to become part of the solution to the state and city's electric problems.

Currently, New York City residential electricity customers are charged a flat rate for electric usage based on an average of utility costs. This is in direct contrast to the utilities' constantly fluctuating production and purchasing costs. The concept is simple. If educated to the actual variation in the price of electricity, consumers will adapt by altering their usage from more costly to less costly time periods. This shift in electrical usage habits will benefit the utilities by matching demand to the available supply. Ultimately, the consumer benefits through lowering energy costs across the board and averting possible brown and/or blackouts during peak usage.

Peak residential electrical usage occurs, most often, during the summer months when more people are at home using a maximum amount of electrical appliances. Air-conditioners, dishwashers, televisions, computers, pool pumps, and interior lights all contribute to an overload. The system is most strained during the late afternoon and early evening when subway and commuter railways are operating at full capacity, commercial air conditioning is at full power, and people are returning home from work.

Recent technology innovations have introduced programmable thermostats that automatically respond to fluctuation in price. One such system, currently deployed by Gulf Power in Pensacola, Florida, allows the customer to control, not only his/her heating and air conditioning settings, but also the operation of large appliances, such as water heaters and pool pumps. The customer is able to pre-program the thermostat to change temperature set points and appliance status based on pre-published price tiers for summer or winter. This enables the customer to take advantage of electric prices when they ebb (night time or early morning) instead of during peak periods.

The New York State Independent System Operator (ISO) is seeking to establish a program much like the Florida model, incorporating free equipment and installation as an incentive here in the city. The ISO, a not-for-profit organization, was created to supply New York's electrical power needs and to facilitate the power market equitably. According to statistics, this past summer's peak capacity projections were exceeded. Considering the moderate temperature range New York City experienced, with few successive high heat days, serious problems could have resulted if capacity was tested. Energy capability projections for the summer of 2002, predicated on a similar rate of growth, could easily surpass system capability.

The ISO is looking to the multi-family housing community, especially cooperatives and condominiums, to set the example of responsible electrical consumption. The assumption is that residents in high-density housing, who own their apartments and have a stake in keeping costs down, may be more responsive and will more easily adapt to such a program.

Along with a price-responsive thermostat system, simple tweaks to a consumer's electricity usage habits can save money, fuel, and the environment. Turning off lights when leaving a room, turning off non-essential appliances, and operating essential service at off peak hours, e.g. running the dishwasher only when filled to capacity and after 11 PM, are simple alterations to behavior that co-op shareholders and condominium owners can easily employ.

Moreover, anyone who has lived through the inconvenience of a summer blackout, especially in hi-rise buildings in which elevator service is curtailed, will undoubtedly alter adverse electrical usage habits to ward off the recurrence of such an event.

Consumer education and easy implementation are the key to a successful energy-saving program. Presented with the case for a price-responsive demand system that will benefit their pocketbook, save energy, and, ultimately, help the environment, consumers will certainly adapt. With new cutting-edge technology currently available, as well as cost-incentive programs that mitigate any monetary outlay on the part of the consumer, everyone wins.