Alert 544: Green Delaware’s analysis of Delmarva Power’s “Blueprint for the future”

Green Delaware Alert 544
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Green Delaware’s analysis of Delmarva Power’s "Blueprint for the future."

Is is a serious proposal, or is PR?

The "bottom line:"

Delmarva Power WANTS to reduce load by 71 megawatts (2.5 percent)
But Delaware CAN reduce capacity needs by 300 to 1000 megawatts

Delmarva Power WANTS to reduce energy consumption by 110,000 megawatt hours (1.2 percent)
Delmarva Power CAN reduce consumption by at least 2.2 million megawatt hours (35 percent).

February 8, 2007

On February 6, 2997, Delmarva Power presented what it calls " … the Company’s Comprehensive Demand-Side Management, Advanced Metering, and Energy Efficiency Plan entitled the "Blueprint for the Future."

This is further described as "The PHI [Pepco Holdings, the parent company of Delmarva] … comprehensive vision for the future and for taking Delmarva and Delmarva’s Delaware customers forward into that future…."

The documents talk about "advanced metering," "smart thermostats," and so on.  The impression is given that Delmarva Power is making a major commitment to energy efficiency.

(As far as we know, only a press release is on line)

What are the facts? 

In the years 2003, 2004, and 2005 Delmarva Power sold an average of about 9,108,000 megawatt hours (MWh) of electricity in Delaware.

(These numbers were provided by Pepco.  Other sources such as the Energy Information Administration vary by up to ten percent.)

(Megawatt hours (MWh) are used to talk about large amounts of electricity.  As individuals we usually think of kilowatt hours (KWh), which correspond to, say, a 1000 watt heater running for one hour.  The average residence uses roughly 1000 KWh per month.)

The proposed "Blueprint" calls for reducing this by 110,020 MWh, or 1.2 percent of sales.

(For various reasons we are not sure these reductions would even be achieved,   But lets take them at face value for the moment.)

To put this in more perspective, Delmarva Power sales in Delaware increased by 47,000 MWh between 2003 and 2005, an average annual increase of about 23,000 MWh.

(Electric sales are influences by weather conditions and many other factors, so we are not saying this is necessarily representative of long-term trends.)

So, the proposed "Blueprint" energy savings, to be implemented over 3 years, are about equal to four times recent annual increases in energy sales.

What IS possible?

Sen. Harris McDowell, Chair of the Senate Energy Committee, has documented ( http://www.state.de.us/delpsc/electric/irp/3rd_mcdowell.pdf):

"… Delaware has the potential to achieve, cost-effectively, a 35% reduction in energy consumption in the residential and commercial sectors."

"… New Jersey will reduce its energy consumption by 20% by 2020."

According to the US Govt. Energy Information Administration ( http://www.eia.doe.gov/cneaf/electricity/st_profiles/delaware.html), Delmarva Power sold about 6.3 million MWh of residential and commercial electricity were in Delaware in 2004.  35 percent of that would be about 2.2 million MWh.

"Energy" versus "Capacity"

To understand electric planning, we have to look at not only energy sales, but also "capacity."  This can be a bit hard to get one’s mind around.

"Energy" is measured in terawatt hours, or gigawatt hours, or megawatt hours, or kilowatt hours, or just plain watt hours, depending on the size units that are convenient for the amounts we are talking about.  They refer to the total amount of electrical energy generated, transmitted, purchased, or consumed.

Capacity, on the other hand, refers to the RATE at which electricity is generated, transmitted, purchased, or consumed.  It is important because the "peak load" (maximum rate) determines how much generating capacity (many and what size of, power plants …) are needed.

Consider that load is much higher in cold or hot weather than in mild weather, higher during the day than in the middle of the night, and so on.  But electricity is seldom stored–at the utility scale.  It has to be generated when it is being used.  

So, a lot of generating capacity is sitting idle much of the time.  This is why "peak shaving," that is, moving some of the load to "off peak" times, can save money by reducing the need for generating capacity.

Back to the "Blueprint,"  which deals with both "energy" (details above) and "capacity" (details below):

The proposed "Peak Demand Reduction" is 71 Megawatts. (Note that there is no "hour" factor in the units used for capacity).

In comparison, Delmarva’s record peak load in Delaware is on the order of 2800 megawatts.

(Different and higher numbers are seen, but remember that Delmarva Power sells power in Delaware, Maryland, and Virginia, and generally reports numbers for all three states together, while the "Blueprint" applies only to Delaware.  We have attempted to factor this out.)

So, the proposed reduction amounts to about 2.5 percent of peak load.

Compare this with what McDowell, says:

"… Delaware’s energy efficiency potential can displace between 850 and 1000 MW of wind generation, and 300-540 MW of coal IGCC generation."

Are these proposals actually a "blueprint for the future?"

In our opinion, plainly not.  They are tokenism, typical utility moves to mislead the media and the public, and divert government agencies from real work.

Delmarva Power has asked the Public Service Commission to:

o       open a docket to "review and report" on the "Blueprint" proposals;

o       "Establish a Working Group / collaborative process….;"

o       "Issue a final order not later than September 1, 2007, approving all cost recovery mechanisms proposed…."

(The Delmarva Power documents, except for a press release, are not online as far as we know).

A few observations from Green Delaware:

o       Green Delaware has been wrangling with Delmarva Power about conservation programs for close to 15 years.  We strongly favor such programs.  But "the devil is in the details" and the public interest will not be served if Delmarva Power drives the train.

o       The same ploys are being use now as were used in the past, including:  (1) withhold the real story from the press and public; (2) dictate to and manipulate the regulators who are supposed to represent the public; (3) propose programs that look like "conservation" but will morph into electricity marketing programs paid for by the ratepayers, and (4) wear people down in futile wrangling.

o       Delmarva Power is a stockholder-owned company focused on increasing profits.  It has incentives to sell MORE, not LESS electricity.  So, like the Garbage Empire fights recycling while pretending to promote it, Delmarva Power talks one line and walks another.

o       On the other hand, load shifting via "smart meters" and suchlike can cut peak demand without reducing sales, thus benefiting the bottom line.  (If your header doesn’t run for a few minutes now, it will run more later and make up the difference….)  This is why we are not surprised to see more "demand response" than conservation in the "Blueprint."

o       But, load shifting can actually increase sales of electricity because equipment runs less efficiently when starting up and shutting down.  Frequent starts and stops can also damage equipment.

Conclusions

Delaware should move forcefully towards conservation and efficiency programs, not settle for utility PR ploys.  These programs can be of great value if set up with the public interest in mind.

Senator McDowell has a task force working on this ( http://www.seu-de.org/) and we hope he is serious.  (Green Delaware has criticized McDowell over and over for being "the Senator from Conectiv/Delmarva Power.")

Meanwhile, we hope that the "Public Service Commission," the "Division of Public Advocate," and the other usual utility regulatory suspects don’t agree to be lead around by the nose yet again by Delmarva Power. 

See http://greendel.org/item.xhtml?name=alert_0542 , and

 Arnetta McRae, Chair of the PSC, 302.739.4247, arnetta.mcrae@state.de.us

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