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July 7, 2009

Study: Maryland has huge potential to cut energy use

The Federal Energy Regulatory Commission has done a state-by-state analysis of the potential for "demand response" mechanisms to cut peak electricity use. Demand response involves incentives and other measures to get people to use less juice. Part comes from agreements like BGE's Peak Rewards plan, which pays households that allow BGE to cycle off their air conditioning at critical times. Demand response will also eventually come from response to price signals. Peak-use electricity is very expensive; on really hot days the price for electrons can jump 20- or 50-fold for a few minutes. Yet the customer has no sensitivity to these spikes because the meters aren't sophisticated enough. The AC stays turned on no matter how expensive the electricity gets.

Eventually "smart" meters will put households at risk for incurring high charges for peak-demand electrons. Adjusting and cutting down shouldn't change you lifestyle much. You should be able to program your meter/thermostat to shut down the AC when megawatt hours reach a certain outrageous price -- say, $100 per megawatt hour. In theory that would leave your unit off for only a few minutes and not enough that you would notice much. And if everybody does it it makes a huge difference for pressure on the grid.

The FERC study finds that Maryland has enormous potential to cut peak demand by virtue of the fact that it already has some peak demand programs in place and the fact that it has a high concentration of central AC among households.

Says FERC:

Ranked by demand response potential as a fraction of peak demand, Connecticut, Maryland and Maine are highest; each has substantial amounts of existing demand response, Maine has an above-average share of peak demand in the Large commercial and industrial customer class, and Maryland has a relatively large amount of residential central air conditioning.

Maryland, the agency says, could cut peak demand by 28 percent by 2014 and an amazing 32 percent by 2019. Not only will that reduce pollution. It will ease upward pressure on electricity prices and reduce the need to build generators.

Posted by Jay Hancock at 8:13 AM | | Comments (1)
Categories: BGE/electricity
        

Comments

Smart metering is a smart solution but the savings need to go to the consumer.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.
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