Getting paid to reduce energy use

Scott Waldman writes on the CapitalNewYork website about an interesting new program from the state of New York to promote energy savings.


Program will pay customers to reduce energy use

The Public Service Commission has approved a program to pay utility customers to reduce their energy usage during periods of peak demand.

The demand response program compensates customers for lowering the air conditioning on hot days. Customers who enroll in the program would receive an up-front payment of as much as $100 and a credit toward a smart thermostat that allows them to reduce their power use on days that strain the grid.

The program, which launches July 1, will be available on a limited basis this summer, according to the P.S.C. It will be rolled out to many more customers by next year.

State energy chair Richard Kauffman said the program will contribute to the Cuomo administration’s Reforming Energy Vision plan to remake the grid by increasing energy efficiency and decreasing reliance on fossil fuels.

“The benefits of these new program offerings by utilities will support the goals of REV by reducing peak, energy and capacity costs while lessening the need to build new infrastructure,” Kauffman said in a statement. “Bottom line [is], we reduce emissions across the state and help to lower the customer’s total utility bill.”

The plan is designed to reduce demand on the grid, but will also decrease reliance on “peaker plants,” which are only used in periods of high demand. Those plants often run on dirtier fuel sources than traditional power sources.

By reducing demand on the grid, the cost of electricity is also reduced. Customers will save money by using less energy, but also if prices drop during peak periods because fewer people are using it. Installing a smart thermostat could save customers up to $350 a year, according to the P.S.C.

At Wednesday’s P.S.C. meeting, commissioner Diane Burman called for a delay in the demand response program of at least a year to better assess its usefulness. She said there was no reason to rush the program this year just because marketers were pressing for it to be put in place. Burman also questioned why it was being approved so late in the season.

P.S.C. chairwoman Audrey Zibelman said the first year won’t necessarily give the results to tell whether the program is successful, but it was important to get customers familiar with how it will work.

“The measure of success this summer is getting it going and getting some experience,” she said. “This is an evolutionary learning process.”

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