Industrial-Load-Shaping: The Practice of and Prospects for Utility/Industry Cooperation to Manage Peak Electricity Demand

Abstract

Load-management programs designed to reduce demand for electricity during peak periods are becoming increasingly important to electric utilities. For a growing number of utilities, however, such peak-reduction programs don't go far enough in the face of new problems and challenges, and hence are proving ineffective or counterproductive. For example, many of a utility's largest customers--especially industrial customers who may be "locked into" seemingly inflexible process activities--have limited ability to respond to load-management programs that employ price signals as a central peak-reduction tool. Moreover, utilities in general are finding that vigorous efforts to reduce electric load can result in underutilization of base-load generating facilities. In these and other instances, "load-shaping," which emphasizes a shift of electric load or demand from peak to off-peak periods and provides for greater customer flexibility, may be a more effective strategy. This paper explains the need for and presents the components of a load-shaping program, and describes Pacific Gas and Electric Company's (PGandE) recent experience in designing and pursuing an industrial-load-shaping program. The paper also outlines important obstacles and opportunities likely to confront other utilities and industrial customers interested in working together to develop such programs.