Smart electricity programs save Rice $1.4 million

Chances are you recall receiving an email from Facilities Engineering and Planning requesting that you turn off nonessential sources of energy consumption. Perhaps you darkened the lights in your office, flipped the switch on lights in a conference rooms or even turned off an idle printer. But how much are these efforts truly worth to the university? A lot, it turns out.

Several members of Rice’s energy management team — from left, Mark Gardner, Richard Johnson, John Windham and Eric Valentine — discuss strategies for conserving power and saving money.

Navigating the electric-power landscape can be confusing and costly for most people. Fortunately Rice has a crackerjack team on the job leading the university’s participation in electricity curtailment and peak management programs that since June 2012 have saved Rice $1.4 million.

“It requires a lot of people, coordination, market intelligence and reliable equipment to make it all work,” Richard Johnson ’92, director of Rice’s Administrative Center for Sustainability and Energy Management (ACSEM) who gave an overview at a recent Administrator’s Forum of how these savings were realized.

The grid

Johnson began with a primer on the electric grid — the interconnected network for delivering electricity from suppliers to consumers. In the United States’ lower 48, the grid is divided into three parts: the Eastern Interconnection, the Western Interconnection and Texas.

“In large and diverse areas like the Eastern Interconnect — where it can be hot in Miami but cool in Wisconsin — it’s easier to balance energy demands and power distribution,” Johnson said. “But in the smaller area of the Texas grid, if it’s hot in Houston, it’s likely hot in Dallas and San Antonio, and demand from the grid will be high from every area.”

The law of supply and demand applies: The price of electricity in Texas can be pretty inexpensive and stable in the cooler morning time, but when the heat of the afternoon hits and demand for power increases as fans and air conditioners get turned on, the cost of electricity spikes. There are times at night when it is almost free and then peak times in the day when it can now legally go as high as $9 per kilowatt-hour, Johnson said.

“In 2011 we had an especially hot summer in Houston with 46 days over 100 degrees, including 24 in a row” he said. “The market price of electricity on the afternoon of Aug. 24 was about 150 times the price of the morning price. Some people refer to Texas electricity as the most volatile commodity in the world.”

Curtailment programs

Rice has a collaborative team on the task of wrangling in energy costs and usage and providing direction to the university for short-term management and long-term planning of energy and other natural resources.

Energy Manager Eric Valentine monitors statewide electricity consumption as part of the 4CP management program.

Among the many conservation and sustainability measures this team manages are electricity curtailment and peak management programs. These are programs Rice participates in during critical moments on the state’s electricity grid when either high demand or disruption in the supply lead to the possibility of brownouts.

One is called ERS-30. ERS stands for emergency response service; 30 refers to the 30 minutes Rice has to respond to a call from ERCOT, the agency that manages the Texas grid, to curtail energy use.

Each year Rice pledges that it will curtail its electricity import by a set amount — typically 3 megawatts, or the amount of energy to power about 600 Texas residences during peak demand. Rice is compensated for each megawatt that it pledges, regardless of whether the university is actually called upon to perform.

“It’s like the Army Reserve but for electricity,” Johnson said. “We have to actually perform if called upon, but if all is quiet on the electricity grid, customers like Rice are paid for stepping forward and offering to share excess megawatt capacity.”

In the ERS program, there are three trimesters per year. In the first trimester of 2015, Rice earned almost $48,000. In the second trimester, Rice earned $19,000.

“The second trimester was less than the first because during the summer, we only participate in ERS during nighttime hours,” he said. “During the day, we participate in a different program that brings more money to Rice.”

For the final trimester of 2015, Rice expects to receive a check of about $52,000, he said.

In the summer during the daytime, Rice participates in a Load Share program through CenterPoint Energy.

“Like ERS, we pledge a certain level of participation and are compensated as such,” he said. “However unlike ERS, we often receive bonuses from over-performance. If we pledge 3 megawatts but provide 5, we are considered for a bonus. Therefore, when a dispatch for the Load Share program comes in, we do everything we can to reduce our load as much as possible. That’s when people are most likely to hear from us to conserve energy.”

Last summer Rice received a check for nearly $140,000 for its participation in the Load Share program.

Lead Plant Operator Glenn Moore monitors power activity in Rice’s Central Plant.

“Combining ERS and Load Share, we’re looking at total revenues of about $260,000,” Johnson said. “This is all for acting as a virtual power plant from the perspective of the electricity grid, using our existing generators and campus load as assets.”

A third program is called 4CP — four coincidental peaks — management. During the four summer months — June, July, August and September — every customer is assigned a peak charge for the coming year that is based on their share of the total grid electrical consumption during the exact moment that the grid hits its peak for each of those months.

“The incentive then is to try to anticipate when that peak is going to occur and then do everything possible to lower consumption at the right moment, which is hard to do,” Johnson said. “It’s a guessing game, but for a customer like Rice, guessing correctly even for one month means a savings of tens of thousands of dollars on the next year’s electricity bill.”

Energy Manager Eric Valentine closely monitors statewide electricity consumption during summer months and when he believes a peak is about to occur, he consults with ACSEM staff and then notifies the team in the Central Plant to enact the appropriate steps to reduce Rice’s electrical imports as much as possible. Once it’s clear that the potential peak has passed, he notifies the plant that they can resume normal operations.

Rice correctly guessed three of the four ERCOT peaks in 2015 and was able to reduce the university’s 4CP charges for 2016 to the tune of $140,000.

“The one peak that we missed was in June,” Johnson said. “Oddly enough, it happened early in the month, June 10. We almost ran our 4CP protocols on that date but decided not to because we were sure that we’d set a higher peak later in the month. In fact, right at the end of June, it looked like that was going to happen. But then CenterPoint dispatched everyone in its Load Share program — including Rice — and we watched the load on the grid suddenly dip, and fall just short of setting the month peak.”

“When we combine the curtailment program revenues and the 4CP management savings from our actions in 2015, the total is $400,000. If we go back to June of 2012, the cumulative total is $1.4 million,” said Johnson. “This is thanks to the hard work of a lot of people — the Central Plant management and operators, the ACSEM team, and all of those people across campus who respond to our calls and reduce energy use in their area as much as they can.”

Johnson encourages Rice staff who want to step-forward to volunteer to reduce energy in their departments to contact him directly by emailing him at sustainability@rice.edu. “The more we’re able to enlist people at the building-level to take ownership to reduce energy use when called upon, the more successful we’ll be,” he said.

Another hot one

The summer of 2016 could very well be another hot one. At some point you will likely receive an email from Facilities Engineering and Planning about an “Energy Share Event” requesting that nonessential items — lights, fans, coffeemakers — be turned off.

“These conservation measures that impose relatively minor inconveniences can reap huge rewards for the university,” Johnson said.