Colorado PUC commissioners advised they should require Xcel Energy to aggresively pursue demand-management strategies
Since July, the Colorado PUC has been hearing arguments on two overlapping dockets about demand-side management and beneficial electrification
At a public comment session on Feb. 1, a common refrain was for the need for Xcel Energy to invest in lower-cost peak-shaving demand-side management strategies. This, said several, will more effectively eliminate the need for natural gas —or methane, as at least one speaker said — plants used to meet peak demands.
“Shaping demand is as important to the future electricity system as supply-side measures,” said Larry Miloshevich, a scientist from Lafayette who has thrown himself into the energy transition.
Miloshevich cited the narrow peaks of demand in Xcel’s load-duration curve.
“It’s crazy to meet this rare demand with expensive and polluting gas-peaker plants when demand-side measures could shave the peak, and in general, reduce generation needs, more cost-effectively.”
He advocates energy storage, energy efficiency, traditional demand-response, and virtual power plants.
Xcel, he suggested, will drag its feet on embracing the most cost-effective solutions.
“So why isn’t Xcel going all-in on reducing peak demand, especially these days with so many recent rate increases for supply-side measures? The answer is the so-called ‘perverse incentive of the cost-of-service utility model,’ where investor-owned utilities earn more by spending more. Since demand-side measures both reduce electricity sales and are not capital investments that earn a lucrative return, IOUs will implement demand-side management only to the extent required. IOUs will also avoid demand-side programs that introduce competition, such as virtual power plants, where a third party aggregates customer-sited thermostats, EVs, water heaters, solar plus storage, etc. It therefore falls to the commission to force the IOUs to move much more aggressively on demand-side management.”
Push back on expensive projects
Steve Whitaker of Boulder said it was imperative that the PUC “aggressively push back on expensive proposals and insist upon lower-cost solutions” that can shave peak demands.
Rebecca Cantwell of Morrison said she would like to see the PUC use its power to force Xcel to address why it has failed to embrace solar thermal. “The industry has almost totally died out, because solar thermal has been excluded from every form of incentive,” she said.
“It’s time for solar thermal to take its place as a key energy resource. Colorado has the best solar thermal in the nation. I want to encourage the commission to require solar thermal as a key gas demand-side management strategy,” she said.
John Gavan, in one of his final public appearances as a commissioner, said he was gladdened to hear her testimony, as he knows from personal experience the effectiveness of solar thermal. He uses it as at his house near Paonia.
Phase out gas incentives
Elizabeth Smart of Wheat Ridge called on the PUC to phase out incentives for installation of new gas equipment between 2024 and 2026 and instead deliver incentives for air-source heat pumps.
Jan Rose of Lakewood called for more microgrids and other solutions that put electricity generation and storage in homes.
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Our electric utilities can afford to let “aggregators,” etc. make a few bucks on behind-the-meter load management. Our regulators need to use findings from other markets and not require huge studies on their own or by our utilities when things are proven elsewhere.
The first place to start is the smart thermostat summer peak demand program where Xcel got egg on its face because it did not utilize pre-cooling which perhaps saved hundreds of MW in California. That is, instead of just increasing the cooling setpoint during that 5-9 pm period, first decreasing the setpoint earlier in the day, when other capacity (soon, a lot of solar) is available. More comfort, less peak demand. Also, they did not allow what I think is the most common smart t’stat (Nest) to participate. Why?
That’s just the tip of the iceberg. Seems like we’ve been arguing about these programs for 40 years. Many times it is hung up on these cost-shift arguments from advocates for poor, elderly, industry, big box stores… claiming another group benefits more or too much. Time to move.
Um… energy storage? Utility scale storage. Duh. Colorado lags far, far behind many other states which are now actively promoting energy storage as a tool to reduce peak demand. I’m not just talking about California, which is the obvious, shining example. NY, Massachusetts and other states are way out in front providing plans and incentives for energy storage – residential, commercial and utility scale. Why are we not doing this? Are our legislators not clued into what’s happening in other parts of the country, or is Xcel blocking this important evolution? Storage prices were (aside from Covid disruptions) and will again be following the same downward trajectory as solar. Let’s get on this bandwagon folks. What are we waiting for?