Lower peak use could mean lower energy bills

By CAITLIN DeLUCA
Capital News Service
LANSING — Energy experts want to lower demand for electricity at peak times to help customers stay green and save money.
Reducing peak demand is called peak shaving, said Sarah Mullkoff, the energy program director for the Michigan Environmental Council.
“An average citizen should be interested in any and all ways to reduce electricity demand and help save money by not investing ratepayer dollars in unnecessary base load power plants,” Mullkoff said.
These base load plants are power plants that aren’t fully used during most of the year, costing taxpayers more money.
If enough energy can be saved, it can eliminate the need for these plants’ unused capacity, she said.
“Fifteen percent of Michigan’s energy capacity sits idle for 99 percent of the year, except for those few hot summer days,”  Mullkoff said.
Jeff Smith, program manager at the Electric Power Research Institute, compared peak usage to rush hour on the freeway.
“Certain times of the day there’s more demand to transport people from one part of the city to another part of the city and that’s called a peak, which is the same thing we have on the grid, a peak time where people want to use it and have the most demand, which is in the late afternoon and early evening,” Smith said.
“To shave that would be trying to reduce that peak a little bit.”
To encourage that, utilities would have to offer price incentives to use electricity during low demand. The ideal is to make it cheaper to run your dishwasher at 4 a.m. than at 6 p.m.
One way to bring about peak shaving is to use smart meters. They provide both the power company and the customer with real-time information on their electricity use.
Smart meters track the use of electricity, which gives consumers the choice to reduce when they use appliances. That can help them save money if rates are developed to encourage that.
Mullkoff said that studies by DTE Energy and Consumers Energy showed smart meters could create $500 million in energy savings.
What’s more, the shutdown of aging coal plants opens demand for different types of energy. That could include energy produced by homeowners, which can help reduce demand at peak times.
The Senate has been working on two bills that encourage peak shaving, update the Clean, Renewable and Efficient Energy Act of 2008 and encourage renewable energy.
Sen. Mike Nofs, R-Battle Creek, chair of the Energy and Technology Committee and sponsor of the bills, said peak shaving can help both businesses and residents.
“Peak shaving is within the sections of the bill. It shaves off those peak hours we use on the grid,” Nofs said.
There’s also a huge benefit if businesses or residents are producing their own energy through means like solar panels.
“The benefit of that is if you are producing energy (through solar), you can get a better return on the energy you’re putting on the grid,” Nofs said.
“When individuals can produce that energy at peak times, it allows that peak not to go up so high, saving us all money,” Nofs said.