From the January 21, 2016 issue
of Public Power Daily
Originally published January 20, 2016
By Jeannine Anderson
The Board of Aldermen in New Bern, North Carolina, earlier this month gave the go-ahead to $5.6 million in funding for the final phase of a project by the New Bern Department of Public Utilities to install advanced meters and new load management switches that will help shave peak load for the public power town.
By a unanimous vote on Jan. 12, the Board of Aldermen approved the funding for Phase III of the project to install the advanced metering infrastructure, or AMI system, said Jon Rynne, director of utilities, and Steve Anderson, the Utility Business Office Division manager, in a Jan. 19 interview with the American Public Power Association.
A recent report from Hometown Connections, APPA’s utility services subsidiary, outlined New Bern’s progress in putting the AMI system in place, as well as the utility’s efforts to streamline its payment policies and to beef up its communications and outreach to customers. The report found that New Bern “has made tremendous advances in its technology” in the last three years, citing the AMI project in particular.
“Given the wholesale pricing structure of power supply and the incentives for peak shaving,” it is likely that the paybacks on the AMI system “will be much quicker for New Bern than in other parts of the country,” Hometown Connections said.
Motivation: Keep rates down
The main reason for switching to the AMI system is to keep electric rates as low as possible, Rynne said. Once all of the new meters and load management switches are in place, and as the revenue bonds to pay for the project are retired, the improvements in the municipal utility’s load management system are expected to save New Bern approximately $1.2 million a year in wholesale power supply costs, he said.
The New Bern Department of Utilities serves roughly 21,500 meters. Most of those — 17,500 of them — are residential customers. So far, the utility department has installed about 5,000 new advanced electric meters and about 2,400 new water meters. The utility also has added 1,300 two-way load management switches out of a total of 10,000 that it plans to install over the next two or three years, Rynne said.
Under the load management program, customers receive rebates on their bill in return for enrolling and allowing the utility to control electricity-hungry devices such as hot water heaters in winter, or air conditioning compressors in summer, during peak load times.
Load management switches turn up missing
Currently, the utility has some 26,000 one-way load management switches at customers’ residences, Anderson told Public Power Daily. But inspections over the last year or so found that 40 percent of those old switches had either been disconnected or removed without the utility’s knowledge, he said. That meant that in many cases, the utility was continuing to provide rebates to customers for participating in its load management program but was not reaping the benefits because the switch was no longer operating.
Rynne explained that it is especially important to shave peak load now, because under New Bern’s new contract with the North Carolina Eastern Municipal Power Agency, or NCEMPA, the demand charges have gone up by 50 percent, from $12.56 per kilowatt under the old contract to $19.35/kW under the new one.
The change in the demand charge occurred as a result of rate restructuring that happened after NCEMPA sold its generating assets to Duke Energy Progress, Rynne said. Under the $1.2 billion purchase, which closed in July 2015, NCEMPA sold its ownership interest in four Duke plants, including units 1 and 2 of the Brunswick Nuclear Plant and the Harris Nuclear Plant.
When New Bern and other North Carolina cities owned a portion of these power plants through NCEMPA, “they were charged under a standard rate schedule, by NCEMPA, that was a declining demand block schedule,” Rynne explained. “The first two demand blocks covered the cost of the ownership of the plants and the last block — the kilowatts above each city’s ownership allocation of the plants — was set at $12.56 kW. This was the only block of demand that would be reduced through load management, so the kilowatt reductions were valued at $12.56/kW,” he said.
After the sale of the plants, “the cities entered into a formula-based rate structure with Duke Energy Progress and the new rate structure between NCEMPA and the cities has a uniform demand charge of $19.35/kW,” Rynne said. “Due to this new rate structure, the value of the demand being reduced by load management has increased to $19.35/kW. The declining block demand rate vs. uniform demand rate structure is what make the demand charge appear to have drastically increased. What really happened was that the peak kilowatts and its reduction became more valuable under the new rate structure.”
Small savings add up; winter peak drops by 10 MW
In the winter, New Bern saves a lot of electricity by using the load management program to turn off elements in customers’ hot water heaters at peak times, Rynne said. The amount of energy saved in each home may be small, but the savings add up.
“If you are getting one or two kilowatts from 11,000 or 12,000 participating customers, that adds up to a lot of kilowatts off demand,” he said. “Through our SCADA system, we can see how our system peak starts to drop off.”
On that day, for example — Jan. 19 — the temperature outside was 19 degrees, peak load was 120 megawatts, and the utility shaved 10 MW off its peak by using the load management program, Rynne said.
The advanced meters also save the utility money by enabling it to read meters and connect or disconnect service remotely, avoiding the need to send a crew and a truck out to the customer’s house, said Anderson. So far, New Bern has saved $236,500 in “truck rolls” thanks to the AMI project, he said.
Another plus is that the project will let the utility offer a pre-payment option to its customers, Anderson said. He said the utility has signed a contract with a third-party provider and is working on a pilot project to develop this program.
The meter automation project will “improve New Bern’s electric and water systems and provide customers with the data and tools necessary to better manage their energy consumption and costs,” according to a flyer the utility is giving its customers when it goes to homes to install the new meters. The two-way meters, which use low-power radio signals to communicate between the customer’s meter and the utility, “will empower customers by providing accurate and near real-time information about rates and consumption, allowing for informed energy usage decisions.”
Forty percent of the utility’s service territory should be equipped with the AMI meters by June, Anderson said.