On the Money: How a Large Building Might Benefit from a DR Program
April 1 is a date that boards in large, master-metered buildings should remember. That's the last day to maximize the benefits when they apply to a number of demand response (DR) programs that pay participants to not use energy on days when the heat or air conditioning spike. That's when Con Ed and/or the New York independent system operator requests "peak load" reductions from large properties that are part of demand response programs.
How do you get involved in such a program?
First, you need to have a peak load starting at about one megawatt (in building size, that's somewhere between 500 and 1,000 units). If you've jumped that hurdle, there are a number of firms called "designated DR providers" or "curtailment service providers" that can hook your building up with the DR programs. Among them are FS Energy (a division of FirstService), Johnson Controls, Siemens, Honeywell, and Con Edison Solutions (a separate company from Con Ed, the utility that services New York and Westchester).
When you talk with a DR provider, a representative will make preliminary inquiries to evaluate your building's potential for load-shedding, determining if your property is a likely candidate. "We provide the connectivity, and then we enroll you in one or more of the programs," says Michael Perna, vice president/business development at Con Edison Solutions. Participating facilities get paid for committing to reduce electric load by a pledged amount of kilowatts (kW). Participants are paid a reservation payment for committing to reduce energy consumption by a set amount when called and another energy payment based upon the actual energy saved during the event.
How much can you make? It's hard to say, but Con Ed (the utility) estimates three incidents per summer and one per winter (though with climate change, who can really say anymore?), 500- to 1,000-unit buildings enrolled in all the programs may earn anywhere from an estimated $154,425 to $308,850 per year. The total profit depends on the amount of electricity your building can reduce when called upon. (Click here for more information.)
The participating residential buildings are, essentially, members of an exclusive "club" made up of master-metered, larger properties. Energy professionals, such as Tom Sahagian, senior program director for technical services at Enterprise Community Partners, asserts that DR programs generally work better in commercial spaces because "there's more that you can turn off. But there are residential buildings that do it." More — er, less power to them!
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