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On Demand Response at the Core of Energy Savings for Large Office Building in Chicago

Thank you for your comment.  I agree that DR can be expensive to implement in existing buildings requiring significant retrofit.  I disagree with the rest of your comment, however.  I will tackle your arguments in turn.

·         Benefits versus costs:   It is appropriate to consider different perspectives on this topic.  For the building owners, it is a competitive advantage to have a building with efficient and DR-enabled energy management systems.  Efficient buildings can demand higher rents and attract “flagship” organizations.   

·         Tenant Reactions to DR:  I disagree with your presumption that occupants will suffer during a DR event.  Our study, like many others, is demonstrating methods to provide a DR service without compromising occupant comfort.  In fact, many DR strategies, such as enhanced weatherization, use of daylighting, and slowing blow fan speeds improve comfort.    With that said, EDF does support increasing our precision in use of DR.  In the context of peak load mitigation, DR services can be aggregated and sequenced, but they need not be delivered by one customer for more than an hour.

·         DR needs a subsidy:   Currently, customers who use proportionately more energy at peak than average are subsidized by other customers.  This is because it costs utilities more to serve customers at peak times.  DR has been shown to be cost effective using traditional, reasonably comprehensive cost-benefit tests.  Most of the value is associated with avoided costs of peak energy supply and delivery.  DR helps to reduce these peak time costs; these avoided costs are shared with all rate payers.  As well, customers who provide a DR service are paid by the utility specifically because the utility (and the CPUC) have determined that it is cheaper to reward customers who avoid peak demand than to provide them with peak-time electricity.   

Importantly, your discussion of the economics seems to consider DR in isolation.  EDF is eager to facilitate the enormous potential value that DR can provide by enhancing the value proposition for energy efficiency investments, storage, and self-generation.  In this respect, DR should be viewed as a piece of an energy portfolio that delivers value for many years.   As you wrote it, “limit and/or shift peak energy demand…should be done - and is done - more and more. It can save money and energy while maintaining proper indoor climate quality.”

I would be interested to learn more from you about how the economics can, should and does play out in real project retrofits.   I’m also interested in your analytical assumptions – are you looking at DR payments over just one season, or many?  Are you looking at DR in isolation or as part of a broad strategy to manage energy costs of a building?

Thanks again,
Jamie Fine


September 9, 2014    View Comment    

On Utility 2.0: NY Utility Regulators Should Consider Change to "Formula for Success"

Thank you for your comment. The path forward here may not emulate that of other countries, but many of the end-state conditions (e.g. better reliability, more renewable energy) are certainly common goals.

-Rory Christian

August 22, 2014    View Comment    

On Utility 2.0: NY Utility Regulators Should Consider Change to "Formula for Success"

Thank you for your feedback. The utility industry has evolved significantly in many areas, but one area that hasn’t evolved as quickly is how regulation determines utility revenue. The ideas set forth in this blog post are certainly not anti-utility but have been put forward with the understanding that we will need utilities to play a significant role in achieving state and federal energy reduction and environmental goals. With the proposed approach, utilities can be in a position to benefit from new technologies instead of potentially being penalized by them.  Many levels of government, private businesses, and consumers alike are already moving in the direction of finding ways of moving to self-generated electricity, a trend unlikely to subside. Taking action now is essential to the long-term success and stability of the electric grid.

-Rory Christian

August 22, 2014    View Comment    

On Net Metering Is in the Air: Solar Energy Progress in Massachusetts and Other States

Let’s continue this conversation over at Environmental Defense Fund would love to hear opinions on whether or not you think net metering is a fair system for compensating owners of distributed generation.

March 24, 2014    View Comment