In the News
ConsumerPowerline to manage energy programs in Mass.Reuters
By Scott DiSavino
Friday January 27, 2006 4:34 PM ET
NEW YORK, Jan 27 (Reuters) - Massachusetts selected ConsumerPowerline to manage demand response and energy efficiency programs for 19 government facilities, including universities, hospitals and correctional facilities, the energy management company said.
After Hurricanes Katrina and Rita curtailed natural gas exports from the Gulf of Mexico, Massachusetts and the regional power grid operator ISO New England sought to bolster demand response programs, which compensate participants for reducing energy use during times of heavy demand or high prices. ISO New England has warned that natural gas shortages related to hurricane damage in the Gulf could affect the grid this winter. Natural gas fuels about 40 percent of the region's power plants.
ConsumerPowerline said it would upgrade equipment and pay facilities to turn on emergency diesel generators to support the grid when needed. Officials at ConsumerPowerline could not immediately say how much power they could save.
Michael Gordon, President of ConsumerPowerline, said the company considered these contracts a $120,000 investment over the next year as part of the company's expansion into New England.
LOCATIONAL CAPACITY MARKET
The electricity market in New England is changing, Gordon said, noting the U.S. Federal Energy Regulatory Commission will probably approve of the ISO's proposed locational installed capacity (LICAP) market in October.
The capacity market pays owners to keep generating plants available for reliability reasons even if those units operate only a few days a year. Currently, all generation in New England gets the same money regardless of where the generation is located.
With the locational capacity market, power plants in a transmission-constrained area, like Connecticut or the Greater Boston Area, would receive more money. This should encourage construction of more generation in those areas.
Gordon guessed capacity prices in constrained areas could soar from the current level of about $3 per kilowatt-month to as high as $110 per kw-month if FERC approves of the locational capacity market. At those prices, it would make sense for big consumers or aggregates of small consumers to cut back on power usage and sell those "savings" back to the grid.
For instance, ConsumerPowerline could help a university that consumes about 10 megawatts of peak electricity demand to cut back to eight MW through conservation programs or disconnect from the grid entirely with a generator.
The university could then offer to "sell" that reduced consumption back to the grid, which could reduce the need for the ISO to turn on expensive peaking units.
ConsumerPowerline hopes its work with the state will help it sign up customers throughout New England and create a large portfolio of capacity for sale back to the grid.
ConsumerPowerline operates in several states and manages more than 400 MW of capacity in New York - the first state to start a locational capacity market.