San Marcos Mercury | Local News from San Marcos and Hays County, Texas

As the utilities and big energy users spar in Austin over how to best encourage the building of power plants, another important issue that is getting less public attention is about how Texas can curb its energy use. 

by JIM MALEWITZ

The “polar vortex” that swept across much of the nation early this month knocked two North Texas power plants offline just as residents began turning up the heat and revving up power use. Grid operators fixed the problem, but not before warning consumers that they were a step away from issuing rolling blackouts.

With that, the weather added fuel to a high-stakes debate about the state’s electricity market and the demands of its soaring population.

“With low temperatures earlier this week, we narrowly escaped rolling blackouts,” a group of electric generators warned in a full-page advertisement in the Austin American-Statesman just days afterward. “We won’t be so lucky in the years ahead if we don’t take action now.”

As the generators and big energy users like manufacturers spar in Austin over how best to encourage the building of new power plants, another important question is getting less public attention: How can Texas curb its energy use?

Generators are pressing regulators to shift the state’s  “energy only” market to a “capacity” model, which would pay power plants to maintain reserves and be ready to meet demand peaks — a multibillion-dollar proposition. They say that low natural gas prices have eroded the economic incentive to build plants.

Critics of the idea — which include consumer advocates and big energy users — say the costs of maintaining those reserves would fall to consumers, and some argue generators are exaggerating the grid’s troubles.

But balancing the grid involves more than just increasing capacity. Perhaps the state’s most promising conservation tool is “demand response,” which relies on high-tech thermostats and meters that allow utilities to power down air-conditioners, heaters or pool pumps when demand peaks. The programs, which are voluntary in Texas, can take many forms. One offered by CPS Energy of San Antonio lets the company control its customers’ energy use when the grid is stressed — usually for a few minutes at a time, and at times specified by customers.

Demand response “probably deserves more focus and attention,” said Doyle Beneby, the president of CPS Energy, a municipally owned utility that has not taken a position in the capacity market debate. “In Texas, it could be a big part of the solution.”

When the polar vortex hit, CPS Energy saved about 77 megawatts of power use through its two demand response programs. That is enough to power 32,725 homes under normal conditions and 13,680 homes at peak times.

“You don’t really notice,” said Adam Leija, who said he has seen his energy bills shrink since he became one of nearly 100,000 enrollees in the utility’s programs. “It helps us become more energy conscious.”

Demand response is gaining momentum, particularly with industrial power users. But the programs have yet to reach their potential amid struggles to break into the large residential market.

A 2012 report by the Brattle Group, a consulting firm, calculated that demand response shaved about 4 percent of energy use during peak demand times in Texas. But if the state took steps to erode barriers to expansion, the report said, that number could reach as high as 15 percent. Little has changed since the report was issued.

The biggest obstacle to widespread growth of demand response, experts say, is that the Electric Reliability Council of Texas, the state’s grid operator,  does not allow demand response companies to participate in the wholesale energy market.

“We need to find a way to bid it into the market,” said Colin Meehan, the director of regulatory and market strategy at Comverge, an energy management firm that has clients in Texas and nationwide. Until then, he said, Texas is essentially functioning with “half a market.”

Editor’s note: An earlier version of this story incorrectly referred to electric generators who are pushing regulators to overhaul the wholesale energy market as “electric utilities.”  Utilities are a separate and distinct type of company.

JIM MALEWITZ reports for The Texas Tribune where this story was originally published. It is made available here through a news partnership between the Texas Tribune and the San Marcos Mercury.

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2 thoughts on “Demand response could factor in grid debate

  1. Here’s the deal…San Marcos needs the following regulation. Any new homes, need to have grey water, rain water and alternative source of energy systems set up. Also the house itself should be LEED certified. Here’s why: Builders coming in and building these communities would be able to do such at a cost lower then what we can, economies of scale. A neighborhood can leverage their size to add these different amenities. What does it do for the city: less wastewater, less energy etc. allows for San Marcos to get more out of their current facilities before having to spend tax money to upgrade. Furthermore, obviously these additions will be past on through the price of the house, allowing for more tax money to be generated. So more tax monies coming in and less being sent out on infrastructure, brilliant business model by anyone’s standards.

    Lastly, it’ll allow San Marcos to dictate the type of conscious citizen any community would want, instead of the commuter. These are the citizens that invest in their local town, with both their time and money. And also the type of citizen’s that will ensure that many generations to come will enjoy the same beautiful city (and river) we all have….

    Before you pass me off as some hippie, I promise I’m anything but, however, I think we can truly have a long term win-win here… For those that think this is insane please enlighten me to what I’m missing?

  2. @wes Government mandates add cost to construction, and mandates and subsidies are only offered for ideas that are not economically viable on their own. If any of your proposed requirements were viable, consumers would be demanding them in greater numbers and builders would place them in homes. Since proponents of these ideas are losing in the court of public opinion, they turn to the government to mandate it which I find lazy. Then the government who knows better than the people what they need and want creates greater barriers to our poorer citizens having housing stability, which leaves more displaced and transient families as the true victims of your “good ideas”. The goal is not maximizing tax revenues, but creating a community where all our citizens have an opportunity to thrive.

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