Los Angeles businesses will get first crack at a new program designed to slice peak power usage through sophisticated electricity meters that allow utilities to calculate bills based on when power is used.
Gov. Gray Davis officially launched a program Thursday to install “real-time” electricity meters in Los Angeles in order to reduce peak electricity use by as much as 240 megawatts this summer.
The Los Angeles Department of Water and Power expects to install more than 3,400 real-time electricity meters at commercial and industrial customers with peak electricity demand of 200 kilowatts or greater. Such customers include large retail stores, manufacturing operations and office buildings.
Real-time meters measure not only how much electricity is used but also when it is used. Because wholesale electricity costs more when demand is high, such metering encourages businesses to reschedule shifts, conserve or shift energy use to take advantage of lower prices during times of low electricity demand.
“Real-time metering is another innovative way California is cutting demand for electricity as we continue to bolster supply” by licensing new power plants, Davis said. “As other municipal and investor-owned utilities install these sophisticated electricity meters, this program alone is estimated to cut our state’s peak energy use by another 500 megawatts this summer.”
Under the state plan, customers with real-time meters will be able to shave 15% off their electricity bills by measurably reducing peak energy use, he said.
“The hope is if people could see the real-time price of energy, they would use less of it,” said Eric Tharp, DWP vice president of public affairs.
Although DWP territory is not part of the power-short electricity grid operated by the California Independent System Operator, the blackout-plagued territories of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric will still benefit, Tharp said. DWP has committed to sell power to the state equal to the amount saved under the program at cost-based prices, which are still being negotiated, Tharp said.
The DWP meters, and others that will follow across the state, are being funded through AB 29X, legislation Davis signed in April that sets aside $35 million for the purchase and installation of such meters. The DWP portion is about $5 million, Tharp said.
The meters are part of a larger energy conservation plan to cut peak summer demand by at least 2,000 megawatts, or enough to power about 1.5 million homes.
How fast DWP and other utilities can get these programs operating depends largely on the supply of the equipment, which can be difficult to get, Tharp said.