Why load management should be on the Co-op radar.

• Author: Sawyer, Karen

As energy prices drive more decisions in the electricity industry, load management is taking on the increasingly important role of managing risk. This transition and other forces--including emerging developments in business, technology and political arenas--make load management an important area for distribution coops and G&Ts to monitor.

In particular, electric co-ops are load management experts, especially in the residential market. Conservatively, co-ops have invested $300 million in demand-side management infrastructure for residential customers, according to a study published in May 2000 by the Cooperative Research Network.

These are assets that co-ops should preserve and enhance as the industry makes the transition to a restructured, competitive environment, according to the study by the Wayfinder Group, a Westborough, Mass.-based consulting firm commissioned to do the CRN report.

Meanwhile, there has been heightened activity in the commercial and industrial market. A host of technology players are finding new and creative ways to enable utilities to engage their large commercial and industrial customers in new load management arrangements. The emphasis is on making a transition from the old "command and control" style curtailment programs to market-based systems use price signals to offer incentives to these large customers.

But what will be the role for the residential load management that many co-ops provide today? How should its value be evaluated?

Quantifying the full value of load management is more complex today because it is playing an increasing role in managing risk, an area that the entire industry is trying to better understand. And most experts would agree that the relationship between market based risk and the residential market is less direct than it is for commercial and industrial. Still, there are some notable examples of how coops are addressing the situation in both market segments.

For instance, Minnkora Power Cooperative, Grand Forks, N.D., works closely with Cass County Electric Cooperative, Fargo, N.D., to avoid high priced purchases and keep consumer rates as low as possible.

Cass County has been involved in load management for more than 25 years. Through commercial and residential programs, the co-op can drop its load from over 160 MW to under 80 MW in less than 30 minutes. "On our first year of progressive load management in 1978, we saved our members $900,000 in wholesale energy costs. Today, that value is close to $7 million per year," says Jeremy Mahowald, energy management supervisor.

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