Design and management of curtailable electricity service to reduce annual peaks

Design and management of curtailable electricity service to reduce annual peaks

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Article ID: iaor19921779
Country: United States
Volume: 40
Issue: 2
Start Page Number: 213
End Page Number: 228
Publication Date: Mar 1992
Journal: Operations Research
Authors: ,
Keywords: forecasting: applications
Abstract:

Curtailable electricity service is a voluntary option in which customers receive credits for permitting the utility a certain number of discretionary interruptions per year. This paper describes a methodology that allows an electric utility to design and manage these service offerings to achieve maximal peak load reduction. This methodology was developed in a project jointly sponsored by the Electric Power Research Institute (EPRI) and New England Electric Service (NEES). A spreadsheet decision support tool was developed for and used by the NEES system dispatcher, who must decide on a daily basis, when to call for an interruption. The methodology also provides guidelines for designing new service offerings, by determining the service attributes and corresponding pricing that will lead to the most efficient use of customer interruptions. Simulated application of the spreadsheet model to NEES’s historical loads indicated that significant cost savings can be achieved during years with high daily peak loads. Although the methodology was developed for NEES, it can be applied at other electric utilities, including those who use curtailable service offerings to reduce peak energy costs or to improve tight reserve margins.

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