THE FUTURE OF ELECTRICITY
Ganging up on energy
Companies and co-ops explore innovative ways to get the best value and reliability for electricity users
Google, the Internet services giant, wants to keep its energy expenses low.
But cheap isn’t the only consideration—the power has to be reliable, too. Google’s computer centers around the globe must operate without a blink 24 hours a day, seven days a week. All those sensitive electronics require a steady indoor environment, so the power for heating, air conditioning, and humidity control systems must be dependable, too.
Google also wants to encourage the use of renewable power sources. But with its buildings scattered in so many places, not all local utilities offer wind or solar or hydro power generating systems nearby.
So the company that’s famous for helping other people search for information on the Internet is conducting its own search for the best way to meet its many energy goals.
Many companies and other energy consumers are getting more involved in power decisions these days. Several paths to a more interactive energy future are emerging.
Partnerships for energy
Along one path, companies take matters into their own hands with direct action. That’s what Google did in January when it asked the Federal Energy Regulatory Commission for permission to buy and sell bulk power at market prices. Then in May, Google announced a multimillion-dollar investment in a North Dakota wind farm. In this vision of the future, big electricity users act independently.
Along another path, electricity users don’t try to go it alone. Instead, they work with their electric utilities and independent energy specialty companies to devise customized strategies to meet their energy goals. In this version of the future, the standard for success includes active customer involvement and unique partnerships in energy decisions.
This interactive, multipurpose strategy is already helping electric cooperatives and their member owners.
Buying and selling electricity in the bulk power markets is a normal part of everyday operations for co-ops. When local generating capacity doesn’t match local demand, generating plants can buy or sell surplus power to balance the flow of electricity through transmission lines.
In the late 1990s, Kentucky’s two generating and transmitting cooperatives, Big Rivers and East Kentucky Power Cooperative (EKPC), joined a new regional group, the Alliance for Cooperative Energy Services Power Marketing (ACES), to improve efficiency and manage costs more effectively.
Originally created by and for co-ops, ACES now includes many other kinds of utilities as well as independent energy producers. Working together, they can find the best prices and times to buy electricity for millions of users.
Managing costs at individual power plants also offers partnership opportunities. To keep on top of changes in sophisticated fuel markets, EKPC has enlisted the services of an energy service company and, more recently, ACES.
During the summer, EKPC’s members need a lot more electricity than its coal generating plants can provide. To meet this extreme demand, EKPC must also use generating plants fueled by natural gas.
However, it takes a lot of time and special knowledge to make good buying decisions because natural gas prices go up and down a lot. For many years, EKPC relied on an independent energy company to monitor those prices. Now ACES helps EKPC keep an eye on natural gas prices around the clock to get the best fuel deals.
Goals for the grid
But what about adding more renewable energy to the grid?
Instead of trying to “go green” alone a few years ago, the folks at Toyota’s Erlanger offices asked the local distribution co-op Owen Electric and power supplier EKPC for help. Together they agreed in 2003 on a waste-to-energy system that uses methane gas from landfills to generate electricity. What started out to help one customer meet a specific goal has grown into six small generating plants throughout the state that provide renewable energy to anyone who signs up for the EnviroWatts program.
Big Rivers and EKPC are also members of the National Renewables Cooperative Organization. The group searches for the most cost-effective ways to develop many different sizes and kinds of renewable energy resources for the benefit of co-op members in many states.
While the experts work together to get the best deals on fuels, provide reliable service, and add more renewable energy to the grid, the search is on for yet another way to improve how the grid functions. Spreading the demand for electricity more evenly throughout each 24-hour period would help improve power plant efficiency.
One way to do that is through time-of-day pricing. Big industrial users and other commercial businesses often pay a higher price for their electricity during peak times when demand is greatest. Prices are lower during off-peak times.
Electric co-ops have a long tradition of working with their industrial and commercial customers to develop workable solutions to these unique pricing structures. Now, independent energy service companies are joining the effort, making recommendations to businesses about such details as shifting noncritical operations to overnight hours to get the most benefit from lower rate structures. It’s a team search for the best energy values.
INFORMATION IS POWER
Mickey Miller, president and CEO at Nolin RECC, says, “As energy prices escalate, residential users and small businesses are looking at more ways they can control their electricity usage and their electric bills. Some of the techniques large commercial customers have used for years may be adaptable for homes and smaller businesses. I can see that features of the smart grid such as digital meters and communications through computers will give people more information to manage their electric bill.”