As we move into the summer season, we are enthused about warmer weather, more daylight hours, farming, recreation, and everything else that goes along with this season. About the only seasonal attribute we are not enthused about is the inevitable presence of mosquitoes. At Nodak, during the summer season, we steer our attention to line construction and our summer peak system demand. It is the latter of these two that I will address in this article.
For nearly 25 years, we have had a load management program which was dedicated only toward winter peak demand. Basically, it has been our strategy to add new electric heating load in a manner in which it will not add to our winter system peak. We have accomplished this by creating incentives for homeowners and businesses to install dual heating systems. They have used their electric heating system the majority of the time, with a very low off-peak heating rate. When we needed to control this specific load, the heating systems had been switched automatically to a backup propane, natural gas, or fuel oil system.
During this 25-year period, we have not had to be concerned about peak usage during the summer months. It was to our advantage if customers added summer load regardless of whether or not it added to our summer system peak. We even offered reduced rates for specific load, such as air conditioning, grain drying, and irrigation.
Like most things in this world, the status quo doesn’t last forever. Our present wholesale electric rate recognizes summer system peaks just as importantly as winter system peaks. Because of this, we have had to phase out of incentive rates for loads which are summer-use only. This change is, of course, not popular with those customers who were enjoying very low-cost power for cooling their homes or drying their grain. The bottom line is that we have lost our price advantage for these types of loads, and we of course cannot sell power at a loss.
A common question is “why can’t we put these summer loads on an automatic load management device like we do our off-peak heating system in the winter?” The answer lies in the fact that their heating system has a redundant backup system, while the summer applications do not. A typical summer peak will often occur on a hot day. In the summer season, it is not uncommon to have system peak demands several consecutive days. With no backup system, it is unlikely a customer will be happy to have his or her air conditioning shut down when it is needed most. In reality, an air conditioner uses much less energy than a heating system, and it is generally not worth the cost savings to experience discomfort on the hottest days of the year for a lower electric rate.
Similar problems exist for grain drying when trying to implement load management. When a farmer needs to dry grain, he generally cannot tolerate interruptions, especially if they occur for several consecutive days. When weighing the consequences of poorly conditioned grain versus low grain drying costs, it is generally felt that load management is not an option.
The majority of load control in summer months is through the use of standby generators. For a larger commercial account, it may be cost effective to purchase a generator to avoid our system summer peak. The customer needs to be cautious when considering this option because the benefit is dependent upon the number of hours we require load control, the capital cost of the generator, and the cost of fuel to operate the generator. With these types of variables, the payback is difficult to predict. For some customers, the use of a generator can provide an overall lower cost of energy while for others the capital cost and the operating cost may more than overshadow the savings. We caution our commercial users to evaluate all costs before embarking on this type of load management.
The bad news of this article is that bargain electric rates during the summer months are not as abundant as they have been in past years. The good news is that our General Service Rate, in which most of our power is sold, has not increased over the past 10 years, and we again do not plan to have a rate increase this year. With the exception of those mosquitoes, the outlook for the summer season is still pretty darn good.