Californians Are Keeping Dirty Energy Off the Grid via Text Message

When power demand rises, OhmConnect sends out a text to customers: cut your energy use and you'll earn money. It's keeping demand spikes under control.

Light switch. Credit: Nils Vik/CC-BY-2.0
To a utility, a burst of conservation can be worth as much as a burst of power. Credit: Nils Vik/CC-BY-2.0

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When Julie Waltz Madziarczyk’s phone chirps to tell her that the electricity grid needs her to save power for an hour the next day, she sets a reminder. And at the appointed time, she walks around the house pulling plugs.

“I shut down major appliances. I unplug air fresheners, I unplug timers on the lights. Anything that plugs in, that’s emitting something, I unplug. And if I can’t reach the plug, I flip off a breaker.”

Madziarczyk, who lives in Temecula in Southern California, said it’s no big deal. “I have a routine now. It takes me about five minutes to shut everything down.”

It hasn’t been a hardship going without electricity for an hour, about once a week. “We have solar lanterns, so if it happens at night, we’re not sitting in the dark. We can do other things.” Those include cooking on her gas stove, using pre-charged iPads and cellphones, going to her son’s soccer practice or out to dinner.

It’s not that Madziarczyk is a hard-core environmentalist. She’s pocketing cash—more than $800 in the last year. The company that alerts her by text, OhmConnect, a San Francisco-based startup, passes along payments from grid operators for her efforts.

A switch flipped here, a plug pulled there—household after household, it can add up to an impressive shedding of electric load and significant cuts in greenhouse gas emissions, according to those who study this kind of potent tool for managing the modern grid.

Grid operators have long relied on commercial and industrial customers, and to some extent households, to curb demand when needed, by charging them less for power at other times. But participation is growing among individuals, thanks to recent federal regulations allowing payments for this service and to third parties like OhmConnect jumping into the market.

OhmConnect aggregates its network of residential subscribers—now numbering in the hundreds of thousands, according to co-founder Curtis Tongue—across the territories of California’s three major utilities: Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. Together these people supply a vital service to the grid: keeping it in finely tuned balance by tweaking demand for power instead of maxing out supply.

It’s called demand response, and it pays in more ways than one. To the utility, a burst of conservation is worth as much as a burst of power. The savings flow through OhmConnect to its subscribers.

Managed this way, the grid runs smoothly—and more cleanly.

Keeping Dirty Energy Off the Grid

Grid operators must constantly adjust the system to produce the same amount of electricity that people are using—otherwise the delicately balanced power network would crash, like a plane with the wrong amount of lift below its wings. They start by predicting ahead of time how much energy is needed for a given day, based on factors like the weather and economic activity. But demand is fickle, and so is supply, especially in the age of wind and solar. The solution used to be to keep a steady flow of power running, known as baseload, and then when demand ramped up or spiked sharply, to bring on more power, known as peaking.

Traditionally, that extra boost came from “peaker” plants, usually older fossil fuel plants that tend to be dirtier and give off more greenhouse gases. Turning them on and off is inefficient, too, like stop-and-go driving.

Moss Landing Power Plant in Monterey. David Monniaux/CC-BY-SA-2.0
The tall stacks of Moss Landing Power Plant’s Units 6 and 7 near Monterey were used primarily during peak periods before Dynegy shut the older gas units down in 2016. David Monniaux/CC-BY-SA-2.0

Demand response is a cleaner answer. In a way, it’s like keeping a virtual battery always at the ready.

Users who cut their demand during the peak, if there are enough of them, obviate those dirty peaker plants. And if mobilized efficiently, the power savers can be a lot cheaper than physical batteries or other ways of storing standby power.

The chance to help reduce greenhouse gas emissions is what captivated another OhmConnect user, Steve Reed, a video game graphics programmer who lives in San Diego. “Letting people know when electricity is dirty is a neat idea. Because most of the time, we just don’t know. There’s no easy way to say, I could do the wash now, or I could wait an hour. And I can actually make a difference by waiting an hour!”

Smoothing the Way for Renewables

A study by Navigant Consulting, an energy management consultancy, found that, in the United States, demand response has the potential to significantly reduce CO2 emissions in two ways.

First is the direct reduction in emissions simply by reducing demand for power. Demand response is also used to finesse the constant smoothing of the power flow, reducing the need for additional supply for this purpose.

Second, demand response indirectly eases the entry of renewables into the grid. Solar and wind power are inherently jittery sources, rising and falling with the breezes and clouds. But if demand response can offset those flutters, these zero-emissions sources are more readily used.

Terrie Prosper, director of news and public information for California’s Public Utilities Commission, said that “increasingly, demand response is being used to smooth out rapid changes in grid energy supply caused by changes in the energy output of variable renewable grid resources like solar and wind.”

Cutting Electricity Emissions, Despite Trump

Navigant’s 2016 study, based on analyses in several big power markets, found that demand response could directly cut emissions by 1 percent, and indirectly by an additional 1 percent.

That may not sound like much, but it’s significant when compared to the Environmental Protection Agency’s target for the power sector to reduce emissions 32 percent below 2005 levels by 2030.

Electricity emissions are falling

Those goals were enshrined in the Obama administration’s landmark Clean Power Plan (CPP), which cracked down on power plant emissions but granted power companies a lot of flexibility in how to meet the targets, including by managing demand.

Now the Trump administration is determined to revoke the Obama administration’s climate policies. EPA Administrator Scott Pruitt, one of the CPP’s most ardent opponents, claims that the EPA exceeded its authority by trying to control emissions with measures “outside the fence” of individual power plants.

Demand Response Will Continue to Play a Role

Whether Pruitt succeeds in clipping CPP’s wings, demand response will be safe, according to former Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff.

During his tenure, he initiated a rule, passed in 2015, allowing grid operators to be paid for curbing demand at the same rate as electricity producers, making possible businesses like OhmConnect, which takes a 20 percent cut of its members’ earnings. “The FERC v. EPSA case will ensure that demand response will continue to participate in wholesale markets,” he said, referring to the 2016 Supreme Court decision that upheld FERC’s authority to regulate demand response payments.

In places like California, long a leader in targets for renewable energy deployment, storage quotas, and other innovations in clean electricity, demand response is secure, he said. And the FERC ruling and Supreme Court decision are encouraging its spread into other markets, particularly those with high percentages of renewable energy, such as Texas.

In California and beyond, OhmConnect and its members are having a significant impact, said Tongue.

Across the state, “the way the markets work, we do not know exactly what power plant we prevented from turning on,” said Tongue. But “our participation prevents the usage of the dirtiest, most inefficient peaker plants.”

Besides California, OhmConnect operates in Texas and, as of last summer, Toronto, where Canada’s energy managers have a similar program to California’s for demand response payments.

Many utility demand response programs rely on smart appliances, such as Nest thermostats or charging electric vehicles, that they can communicate with wirelessly to nudge them down (with owners’ permission) when needed. OhmConnect uses these automated strategies, but it also relies on customers’ behavioral response to text notifications, like Madziarczyk’s. Roughly 85 percent of its members do not have automated devices, said Tongue. But the company’s automated users tend to save about twice as much as behavioral users.

Credit: QSC AG
Technologies like smart plugs are making power conservation easier by allowing users to control power to the plug and monitor and schedule usage with smartphone apps. Credit: QSC AG

The high rate of behavioral response is surprising to many industry insiders, who don’t think that changing habits will be a significant part of the solution because they think people won’t stay motivated and engaged. Tongue said that OhmConnect was intrigued to see how enthusiastic its users were about not just saving energy but having a dedicated time to unplug. They saw it “as a catalyst to intentionally set aside time for reading, or time with their family to play a board game or to have a candlelit dinner. It gave people a chance to unplug and recharge—metaphorically,” he said.

But OhmConnect also encourages its users to consider automated devices such as wifi thermostats, smart plugs into which people can plug various electronics, or electric vehicles.

The Grid of the Future

For 100 years, electricity was a pretty staid industry. Power plants generated electricity, and utilities and grid operators sent it to customers in a one-way operation. As more people have installed solar panels, supplying much of their own electricity, and as more wind and solar have come online, producing power only part of the time, the industry and infrastructure are having to rapidly adapt. A major change, demonstrated by OhmConnect, is that now power and payments are moving in both directions.

The United States leads the global demand response market, with about two-thirds of the global market in 2013, according to a report by Advanced Energy Economy, with programs mostly set up by regional grid operators.

Technology trends have also enabled the rise of individual demand response, said Tongue. Smart meters allow utilities to track people’s use each hour or even every 15 minutes, a big change from when a technician visited your meter once a month to read it. Across the United States, about 40 to 50 percent of customers now have smart meters, said Tongue.

High-powered data management software allows companies, utilities, and grid governing bodies to see the big picture of supply and demand and to refine their matching efforts. And the smart grid allows these entities to “talk” to devices such as wifi-enabled thermostats or smart plugs to turn off or turn down electricity consumption at key times.

For OhmConnect users Madziarczyk and Reed, the hands-on, can-do aspect of demand response is rewarding.

“It’s gotten bigger since I started with it. They have a lot more users now,” said Reed. “And the neat thing is, that means we’re actually making a bigger and bigger dent. We literally can keep a dirty plant offline. And that’s really a neat, power-in-numbers sort of thing.”

For Madziarczyk, it’s so easy she can’t see why she wouldn’t do it. “Everyone thinks they’re going to be inconvenienced. But it’s not that inconvenient; you just have to get in the habit. And the success helps you build that habit. There are very few things that reward you for such a small effort.”