Meeting the Obligation to Serve in Era of Rising Temperatures

Utilities large and small have a duty to serve electric power to any consumer who is seeking and willing to pay the rates set for this service. While this obligation has historically been used to justify utilities’ demand for profitable concessions from regulatory authorities, it comes with the responsibility to meet ratepayers’ demand for power, especially during the hottest days of the year. For utilities within the California Independent System Operator (CAISO) service territory, the challenge to reliably and cost-effectively meet this demand is increasingly becoming an annual nightmare. 

Since 2006, when the peak demand for power hit an all-time record high of 50,270 MW, utilities have been dealing with high temperatures that seem to be getting worse. For utility executives managing power demand in regions with unseasonable heat waves, it does not matter whether they personally believe in global warming or not, rising temperatures are an unavoidable reality. Utilities have a contractual obligation to serve power reliably to ratepayers who need it the most when temperatures rise. During days with unseasonal temperatures, nearly all consumers crank up their AC units, in addition to other plug loads and other larger indoor loads. The culminating effect across the combined grid is immense stress. Ultimately, if this is not managed, it can lead to serious reliability issues and possible power outages. 

Given this summer is gearing up to be another hot one, with the summer peak for June 20 and 21 exceeding  47,000 MW each day in the CAISO footprint, the system operator issued a Flex Alert to consumers with tips on how to help avoid reliability constraints. According to ISO CEO and President Steve Berberich, “Conservation efforts by consumers are key to reducing stress on the system and to help avoid service disruptions.” 

What utilities can count on is rising temperatures in the upcoming years. In fact, it does not matter whether utilities are located within the CAISO service area or not when it comes to changing weather patterns. To successfully shave peak demand and avert both financial and reliability constraints, both bulk power and distribution system operators need the advanced technologies that have the capability to provide forecasting, advanced demand response management, visibility into network conditions, and more. For CAISO and its extended network, the result of its growing Energy Imbalance Market (EIM), the employment of best-in-class automated tools for forecasting load demand and taking steps to reliably and cost-effectively satisfy that demand, need not be overemphasized. Many entities looking to participate in this nascent market are turning to OATI energy imbalance market software to fulfill this important need. 

As you prepare for this summer and subsequent summers, take advantage of the opportunity make strategic plans that will put your utility on the path to achieving deep Demand Response (DR) savings that are way beyond traditional programs. This is one of OATI’s flagship capabilities, a benefit-proven Demand Response Management System (DRMS) that currently delivers up to six percent in savings. Its additional beauty lies in the advanced engineering that makes it possible for utilities, whether they have Advanced Metering Infrastructures (AMIs) or not, to deploy it cost-effectively, and then enjoy its benefits without the need for customer engagement programs like Flex Alerts!