Texas Demand Response Programs
October 2007

What energy efficiency, demand response, and predominant use study programs are available in Texas?

The PUC of Texas which stands for Public Utilities Commission of Texas regulates and watches over a large variety of utility and retail suppliers standard offers and market transformation programs. They oversee the investor-owned utilities service territories and all incumbent provider areas in Texas. They have access to a Systems Benefit Charge of $80 million dollars a year that is paid for by a charge in the TDSP charges on a companies electric bill. So everyone pays for the ability to make the industrial plants in your area more energy efficient and clean.

The Standard Offer Program is provided to both commercial and industrial businesses in order to implement energy efficiency measures that will retrofit and renovate outdated energy hog machines in the facilities and plants affected. Companies receive paid incentives for energy and summer peak demand savings. The savings are calculated on a deemed savings value or an accurate measurement of the savings, when available. The requirement is that the peak demand of the company wanting to take advantage of the program have atleast 100 kW of demand. The contractors who come in to do the needed studies and retrofits can be local contractors, energy service companies also known as ESCOs and internal employees for the company. The conservation measures that are done are completely up to the facility but must provide at least 10 or 20 kW (up to the utility) of summer peak demand savings per project. The incentive payments can range from $150 to $200/kW (at peak) and $.05 – $.07/kWh (of 1st year savings).

If you are in the Dallas Fort Worth Area, Oncor Electric Delivery offers a program to assist in retrofitting your commercial or industrial facility with energy efficient measures in cooperation with the state of Texas. Learn more about Oncor Electric Delivery’s Energy Efficiency Government Credits program

You can access the energy efficiiency program for your utility area in Texas by going to Texas Energy Efficiency site.

What utility energy efficiency programs are out there for Texas companies?

Please follow the link above for standard offer programs offered by several Texas utilities.

If you are in the Houston area you could have a 50% return on your investment in the first year alone by being a part of their energy efficiency program. CenterPoint Energy’s Commercial and Industrial Retro-Commissioning Program works towards finding low-cost peak demand savings and implementing the needed changes immediately. CenterPoint will refer qualified commissioning agents to commission your facility in exchange for a commitment by the facility to invest at least $10,000 in recommended measures. Keep in mind you will recoup this money in a year which means a 50% return on your investment. This is bottom line money and of course justifies any facility services manager’s position in such a situation. Take advantage now, don’t wait.

Austin Energy (in the Austin Texas area only) offers a Commercial Rebate Program, which covers air conditioning, lighting, roofs, chillers, energy recovery ventilators, motors, variable speed drives, windows, and custom measures. A separate program offers free (installation included) Energy Miser vending machine controllers.

What load management/demand response options are available to my facility?

If you are a large commercial or industrial electric service customer in Texas you will get the largest return on investment and many times no investment is necessary by participating in LAAR and other demand response programs. Please fill out our contact form if you would like an electrical load curtailment engineer to go over possible options for your company.
Federal customers can receive payments for providing load curtailments through several programs offered by the Electric Reliability Council of Texas (ERCOT).

  • Balancing Up Loads (BULs): Customer load curtailment offers can be bid into the Balancing Energy Market. If the bid is selected and the load reduction is provided, compensation is made both in terms of an energy payment based on the prevailing market clearing price for energy (MCPE), and a capacity payment based on the market clearing price for capacity in the Non-Spinning Reserves Market.
  • Load Acting as a Resource (LaaR): Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, although 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.
  • Voluntary Load Reduction: Customers receive payment for curtailing load at their discretion, in response to the actual or projected hourly MCPE.
  • Emergency Interruptible Load Service (EILS): As with the BULs and LaaR programs, customers bid to provide load reductions. However, this program is aimed solely at alleviating emergency (as opposed to high price) conditions on the ERCOT grid.

For all programs, the customer participates through their Retail Electricity Provider (REP), and transactions with ERCOT are conducted by the qualified scheduling entity (QSE) for the customer’s REP. The specific terms for customer participation, including compensation, are based on the contractual arrangement between the customer and their REP.

Austin Energy (available in the Austin Texas area only) offers the Load Cooperative Program wherein customers receive incentives (payable June through September) for committed load reductions. Payments total $5/kW (paid monthly at $1.25/kW per month) for all committed load, along with a payment of 15 cents/kWh for energy reduced during any actual load curtailment.

What distributed energy resource options are available to our company?

The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following program may of interest to federal customers:

Austin Energy’s Solar Rebate Program offers a $4.50 per watt rebate (up to $100,000 or 80% of system cost, whichever is less) for photovoltaic installations by program-approved installers.

Are there energy efficiency programs sponsored by the Texas state government?

For information on state-sponsored energy efficiency programs, contact the State Energy Conservation Office at the Texas Comptroller of Public Accounts.

What additional opportunities are available to my facility?

Federal customers also have opportunities to pursue energy efficiency projects with utilities (e.g., CenterPoint Energy, Central Power & Light, El Paso Electric, Entergy, Houston Lighting & Power (Reliant), Southwestern Public Service Company, and TXU (Oncor Electric Delivery) that have area-wide contracts with GSA and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.

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