Perplexing Problem of Electricity Outages, Brownouts, and Blackouts

What a Nuclear Power Plant Looks Like From Several Thousand Feet


 
 
 
So why don’t the electric utilities simply put more power on the grid so as to prevent the shortage of electricity in the first place?

For the average electric service consumer this is a common and reasonable question to ask but really you should be asking a different question.

The question should be, “Why isn’t there more power “Available” to put on the grid than there is currently in order to prevent a blackout?”

Try and think of electricity like water going through a pipeline. Just as you can only force so much water down a pipeline at one time so is the case for electricity. In the pipeline there is more than enough water to meet the demand and you simply turn on the faucet and take what you need.

Try to think of the flow of electricity through the electric grid as you would think of the flow of water through pipe lines. At a set voltage (pressure) it’s impossible to make any more electrical current (volume) go down the line than is possible to flow through the end appliances (valves).

Electric power travels down the grid in a similar manner as in your water line, we take what we need from the power that is made available on the line at a certain voltage.

Back at the power plants only once more electricity is being demanded can the power be generated and more made available on the power lines. If a few power plants go down or a hot summer days estimates are off it could be too late to turn on another power plant in time.

Nuclear plants are very expensive and hard to shut down and start up so when less energy is demanded the first power plants to turn off are hydro and gas plants.

If there is a hot summer day in Texas the following day the gas plants get turned back on again to meet peak demand during that day. The trick the grid operators have to achieve is in creating just the exact amount of electricity as is demanded during the day and sending it down the power lines.

When demand estimates are off and businesses and residences are in danger of having a power outage Texas works a program that involves businesses who have prior agreed to turning off their facility during peak times in the day to keep the flow of power going in order to prevent a brownout or blackout.

Often these facilities have backup generators that create electricity while they remain off the grid and so their facility still runs with the electricity they create on site.

The electricity demand curtailment programs available in Texas are listed below.

Load Resource Participation: Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, and all programs require that customers have real-time telemetry installed. For the Responsive Reserve and Non-Spinning Reserve markets, capacity payments are made regardless of whether the customer is called upon to curtail. click here for more info on LRP

Voluntary Load Response: Participants get compensated for curtailing electricity load at their will, in response to the actual or projected hourly MCPE. click here for more info on the VLR program

Emergency Interruptible Load Service (EILS): Participants bid to provide electric load reductions. The program is for helping in emergencies rather than simply high price conditions on the ERCOT grid. click here for more info on EILS

If you would like to participate in one or more of these demand curtailment programs with the state of Texas our group of energy consultants can assist with all the details. Please use our contact page to let us know if you would be interested in this unique way to receive money in exchange for turning your power off for a short interval and running on generator power.

Why Do Texas Churches Have High Demand Charges on Their Electric Bill?

Texas church demand charge The way the PUCT wrote the rules regarding peak demand charges and electric usage rates set by electric utilities like Oncor Electric Delivery allows for interpretation. As currently interpreted by electric utilities most churches pay unreasonably high demand charges even when little or no energy is used at their facility. The problem according to the TEPA organization and the Texas Baptist Christian Life Commission is that the rules have resulted in some unforeseen hardships on houses of worship. For instance, many churches are low load profile customers that may be above the 25% load factor rule but below 35%. Oncor already defines a low load factor customer as 40% and below. The TEPA organization or Texas Energy Professionals Association has requested that the rule by changed to make secondary voltage non-residential customers that are as much as 35% in load factor but still a low load profile customer avoid what are referred to as demand ratchets.

What is the Reason in the Current Law for Having Such High Demand Charges on Churches

The goal of the law was to make the demand charges for different load factors and the use of energy during peak demand periods a fair price for all non-residential accounts. What some believe has occurred is a harsh penalty on some places like many houses of worship who have to deal with a demand ratchet when their electric usage may peak on a Sunday but be flat to non-existent the rest of the week. The law was setup to be a one size fits all type of rule so it would spread out the penalty but in reality churches feel a huge brunt of these very high energy demand charges because of the unique characteristics of how they use energy during the week.

What is a Demand Ratchet?

A demand ratchet allows an electric utility to charge a minimum amount on your electric bill each month regardless of what you are actually using. They calculate this based on your highest peak month of the year and than take a percentage of that and charge you that as a monthly minimum. Your monthly minimum might be $300 – $500 and for some churches much more than this. Imagine paying this amount each month even during a month where you only used 900 kilowatt hours all month long! It can be shocking!

How Do you Lower the Demand Ratchet Penalty?

Many churches leave their current retail electric provider and try to find another one thinking that will fix their issue. This change in retail providers will do nothing to lower the demand ratchet problem. You may reduce the retail electric provider rate associated with the monthly kilowatt hours you use but the monthly minimum demand charge you pay will remain unaffected. In order to lower this demand ratchet amount currently you must show 11 months of historical change in your peak demand for electricity. A church many times has an annual load factor of 25 percent or lower. About 98% of churches fall under 35% for their load factor which is considered low as Oncor utility even defines 40% load factor as a low load profile. In this situation it makes sense to not penalize churches with super high minimum demand charges each month when they maintain a low load factor.

Churches are metered for demand by the electric utility in an unusual way from a churches perspective. The utility goes back historically and finds the highest kilowatts demanded in any one month. They bill a church a minimum percentage of this amount on their electric bill each month that could be in the range of a minimum fee like $300 – $500 and up. The problem is that a church is usually a fairly large facility and so it is capable of demanding quite a bit of energy all at one time if it needs to but that usually only lasts for the time of a service on Sunday on a hot summer day. If it is a hot Texas day and the AC equipment is old and outdated it might turn on and run all Sunday service long without ever cooling sufficiently. A peak demand might be reached that is extraordinarily high. So a church member donates 5 brand new high efficiency AC units so that doesn’t happen again. In the current law it does not matter what upgrades you made in efficiency. A new peak demand level has been reached and so for the next 11 month the church will have to pay $500 at minimum as their demand charge even if they use zero dollars in energy.  In order to lower the demand penalty number the church must lower that electricity KW demand number for the next 11 months and then the utility will make an adjustment lower in that demand charge.

What is Being Done to Change the Current Texas Church Energy Demand Charges?

A church that has a load factor of 25% or less is a low load factor church in the current PUCT rule but yet their is still a demand ratchet. A lot of law makers, organizations like TEPA, electric utilities, and city organizations are in agreement on changes that need to be made in the law specifically for churches because of their unique characteristics that are unlike most business uses of energy. This PUCT Substantive Rule 25.244 is attempting to dramatically change the law so that most churches will not have to deal with the huge hardship of paying an extra $300 – $500 in demand charges on their electric bill each month.

Will My Church Qualify as a Low Load Factor Church?

Many churches in the U.S. qualify as a low load factor non-residential electricity customer. Load factor is simply a way of describing how much energy was used in a time period, versus how much electricity would have been used, if the electric power had been turned on during a typical peak demand time for that customer. Many churches must work to avoid ever reaching a certain pinnacle of peak demand or that number could haunt you for the next 11 months as that is what your minimum demand charge is based off of. This long 11 month penalty is referred to as a demand ratchet.

How Do I Calculate My Churches Load Factor?

You can always contact your electric utility NOT your retail electric provider to find out what your load factor is and how they calculate it. Keep in mind if you signed up with a retail electric provider like Spark Energy, Bounce Energy, or Ambit Energy and live in Dallas you would call Oncor Electric Delivery to ask this question. If you signed up with one of these retail electric providers and live in Houston you would call Centerpoint Energy Utility.

The way Oncor and other electric utilities calculate the load factor percentage is by dividing the total kilowatt-hours consumed in a designated period such as a month by the product of the maximum demand in kilowatts and the number of hours in the month.

So let’s say we have a Texas church that uses 36,000 kWh in the month. We would divide that number by their peak demand which is 100 kW multiplied by 30 days multiplied by 24 hours in a day.

What you end up with is 36,000 kWh divided by 72,000 kWh which gives you a 50% load factor. What this means is that the church used 36,000 kWh and this was 50% of the total energy the electric utility planned to have available for this facility to use at the 100 kW demand level.

So Why Have Churches Been Cheated Out of So Much Money From Past Demand Charges?

The intended goal of the current demand ratchet rules was supposed to be a one size fits all approach but the law makers did not foresee how the special characteristics of a church would cause the law to significantly penalize a church compared to other nonresidential facilities.

You see the electric utility must plan at all occasions the likelihood that the church may need to hit that demand kW number of 100 kW. In order to offer this power guarantee to this facility they must charge a premium for this 100 kw high demand number that this church requires even though they don’t use a lot of monthly electric usage in kilowatt hours.

All electric utilities such as Oncor Electric or Centerpoint Energy must be able to meet peoples peak demand for electricity at all times or risk a blackout. When utilities structure in demand charges they can build up their infrastructure to offer this peak electric power when it is called for. This is why many churches in a city can open their doors on Sunday and turn on all their power at the same time and the city doesn’t have a resulting power outage.

The good news is that work is being done in the political arena for churches at the Public Utility Commission of Texas to make the case that churches that have a 25% and as much as a 35% or lower load factor should not have an 11 month demand ratchet in place. These demand ratchets make it harder for churches to work to lower their peak demand number because when they do make a change in the efficiency of their building they receive no reward for doing so unless they keep it low for the next 11 months.

Just as the PUCT has made changes to their energy demand penalty rules for certain agricultural businesses in Texas we believe there is a solid case for lowering energy demand penalties for Houses of Worship. The great news is that we even have the electric utilities on our side for changes to these laws for churches and they see that making these changes will not hurt their ability to provide reliable power to others on the Texas electric grid.

You can read more about the PUCT Substantive Rule 25.244 and a request from a local Texas christian organization to the PUCT …. click here for the Texas Baptist Christian Life Commission’s request to the PUCT

Another Free Market Failure Accusation About Texas Electricity Deregulation

Clean Coal Power Mike Norman with the Fort Worth Star Telegram hits on the topic of if Texas deregulation is really working. I assume he places blame on deregulation as the reason for the Texas power supply failure because the title of his article states, “The Texas free market for electricity just isn’t cutting it“. Maybe he is just meaning that as good as deregulation is it can’t stop the EPA and other non-governmental organizations from halting all oil based energy production thereby raising consumer costs. Deregulation being a failure is a popular argument because any time prices go up or supply capacity is reached we hear about it from the political side that benefits the most from this view.

Is deregulation to blame for every time something bad happens in the deregulated Texas electricity market? No you can’t always blame it on deregulation but it is a piece of the puzzle so yes it is to blame sometimes. The main problem with deregulation isn’t inefficiencies building electric grid infrastructure and power production as this gets approved by the state and then shutdown by the EPA and federal government, not deregulation. Texas has broken up the generation companies and such away to allow new investors to come in and build power facilities but not many have filled this hole left open for increased competition. I think new investors have not come in because you are talking about investing in and building highly federally regulated things like coal, natural gas, and nuclear power facilities.  What new investors want to do what TXU just got shutdown by the EPA for trying to do? I see problems with how some retail providers try and use tricks to market their electric rates but regarding power supply being built out the bottleneck seems to be in government regulation still being in the mix too much.

Even if the market was regulated again under one monopoly per electric utility area you would just as easily be able to blame brownouts and blackouts on the monopoly regulated electric utilities just like deregulation gets blamed for things now. I don’t think Mike is trying to place all the blame on deregulation but he is pointing out that you will see an electric bill increase regardless of the provider you choose because of some recent failures in the Texas deregulated market. You see you very likely will find more non-negotiable ERCOT related fees on your electric bill eventually because of lack of electric supply available to meet demand but who is really to blame for this?

Mike explains that a free market should work in theory because investors are encouraged to place their money where the highest return will be received and in so doing offer just enough electricity to cover the demand as well as spikes in demand. In a perfect system the investor is rewarded a maximum profit for producing just the right amount of power with very little waste left over.

The problem Mike sees with the current deregulated market in Texas is that power plants break down or have to be shutdown to fix or maintain it resulting in loss of supply. If Murphy’s Law is in effect and a power demand spike occurs around the same time as a maintenance shutdown all of a sudden there is not enough power to go around for everyone.

These imperfections are problems that political powers bring up in order to fault the great electricity deregulation experiment of 2002. Will this blame game reverse deregulation in Texas? I really doubt that deregulation can be reversed anytime soon. There is huge public support for energy choice in Texas. Many people can show you on their electric bills how they have saved money because of deregulation simply from using our Electricity Bid website.

Is Deregulation to Blame for Lack of Sufficient Power Supply in Texas?

The problem we are faced with in regards to electric power supply in Texas for 2012 is unreliable power supply due to not enough power plants in operation. Is deregulation responsible for this lack of power?

No! In fact TXU was approved for and planning to build 11 new coal fired power plants that utilized clean burning technology and significantly reduced pollution from these plants compared to the old mothballed coal plants from the past. The prior mayor of Houston and Democratic nominee for governor of Texas, Bill White complained in 2010 that these plants were unnecessary but now they seem all too necessary. ERCOT predicts very tight power supplies this summer and this has politicians frantic but I’m sitting here wondering why we didn’t just get started on those 11 coal plants in 2010?

I think what Pat said has a lot to do with our problems…..Pat Ennis with Priority Power Management said, “”I’m not the smartest guy around, but I’d be willing to bet that… we’re not going to have any coal plants built here in Texas for a long time — between the EPA and the environmentalists, coal is kind of a no-no.”

The state of Texas has been contending with attacks from the Environmental Defense Fun and the EPA in regards to an argument that is mainly about the states CO2 emission levels. Instead of focusing their argument primarily on pollution like mercury levels and other scientifically verifiable pollutants they were able to stop 11 new coal fired power plants from being built by TXU because of a global warming argument.

Many scientists and climate scientists non-affiliated or backed by the United Nations IPCC organization disagree that global warming has a negative environmental impact or that man has anything to do with it. Over the last decade their has been a decline in average global temperatures and so to even argue CO2 levels to prevent Texas from expanding their power capacity only serves to hurt these environmental activists causes.

What Can Texans Do to Increase Power Supply?

Does anyone remember back a few years ago when TXU proposed building multiple state of the art clean burning coal power plants? These power plants would have significantly updated the power infrastructure in Texas but the plan was shutdown because of environmental nut jobs. Even though the power plants would have been state of the art cheap coal power with significant reductions in pollution compared to current coal power plants in operation the plan did not go through. The state of Texas must fight the EPA and federal government politically where it hurts and take back our state and its ability to provide power to our citizens.

Even with an unsatisfactory amount of power generation plants built in Texas we have seen a steady increase in large commercial and industrial facilities building on-site power grid infrastructure that are little mini power generators for their companies. These miniature power generators also known as distributed generation systems account for a large portion of the overall electricity consumption in Texas. During peak demand periods in the day these generators can turn on resulting in no need for the state to start rolling blackouts in residential neighborhoods.

The Texas demand curtailment program has been a huge success. Companies are paid to enroll in a program that they do not even have to participate in when and if they are asked to turn off their power for maybe only 20 – 30 minutes in the span of 1 month. The program is enrolled to it’s limits each time Texas opens it back up. What does this mean? There are likely more than enough large commercial and industrial facilities that would jump at the chance to shutdown production for a short interval in exchange for being paid by the state of Texas to do so. Consider that many large companies like this shutdown once a month anyway to test their back up generators so why not get paid to do this?

Solar generation at this time is not a good option for solving the states problems but has limited uses.  As we have seen, large federally backed companies like Solyndra have not even been able to stay a float because of the expense it costs to produce cheap affordable power using solar. Hey I am a fan of solar but like most people I can’t afford to build a solar off the grid system on my home or business. If I can’t afford the system like most of us why would you think the federal government can? We are at record breaking tax deficits in the beginning stages of an economic collapse and those tax dollars are to be used for things that are considered affordable and have at least a 10 year return on investment. Wind power is a partial option but is only viable to use in combination with natural gas power generation as it can share in the control systems and connections to the grid.

The smart meters, and energy efficiency programs utilities across the state offer continue to assist in teaching home owners how to make their homes more efficient and lower their monthly energy bill. These programs should continue to be encouraged and promoted through local electric utilities that control the power infrastructure.

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