Juneteenth

Posted on by greggdixon@voltus.co

We’re proud to announce that Voltus will begin recognizing and celebrating Juneteenth as a company holiday, and encouraging Voltans to do with Juneteenth what matters most to them. We encourage our team to deepen their understanding of the African American experience, find a movement to be part of, or become further immersed in African American cultural events.

At Voltus, we love the grit that goes into overcoming challenges to achieve success and happiness. We can’t think of a grittier success story than that of African Americans in the United States. The atrocity of the beginnings of the story, that are still being told, is eclipsed by the successes and spirit of a culture that has overcome immense oppression, an oppression that continues today. When we reflect on what this day means, we are filled with love, compassion, understanding, and respect. These are values that are on offer for all of us as we recognize the freedom that all people deserve and that many African Americans, sadly, don’t fully experience. Yet, still, the African American tapestry of contributions to what makes America great is, in so many ways, unparalleled. Our lives are filled with the joy of these contributions every moment of the day, from the bounty of the crops that feed our families to the basic freedoms we all enjoy to the artistic contributions that form the rhythmic backdrop of life.

How is it possible that an entire race and culture, enslaved to build the foundation of a country, aren’t leveled up to equal treatment nor celebrated, as they should be, as a triumph of human spirit? Perhaps collective guilt and shame. What a lost opportunity it would be for all of us to not fully understand their journey while helping them fully realize and enjoy the unalienable rights we so often take for granted. 

Voltans seek to level playing fields. We are inclusive. We speak truth to power. We have an opportunity to be part of positive change. The celebration of Juneteenth will mark one small contribution to this positive change as we look for more ways to help.

A Response to COVID-19.

Posted on by greggdixon@voltus.co

All,

Dealing with the reality of a global pandemic is new for all of us. We don’t know the full business impact of COVID-19, but we do know it’s negative, certainly in the short term and possibly the long-term.

A business downturn results in two things:

  1. Organizations look to save cash.
  2. Organizations have more operational flexibility as manufacturing lines aren’t running at full capacity, offices aren’t fully staffed as people stick closer to home, hotels aren’t filling up, etc.

At Voltus, we are in a unique position to help you prepare for this downturn. Demand response programs turn this unforeseen operational flexibility into cash for your business.

We make it incredibly simple to enroll and get started in these programs with a simple one-page agreement. There are no out of pocket costs. There are no risks. Our technology is installed by your own electricians, keeping your team working. The entire process is remote.

Demand response is a small but important part of the solution to the challenges ahead of us. Join us in keeping our economy strong by turning COVID-19 on its head.

Stay healthy and safe,

 

 

 

Gregg Dixon
Voltus, Inc.
CEO

 

 

 

Week #2 – Getting the Most Cheese from Demand Response: Unlocking the Value of In-Market and Out-of-Market DR Programs

Posted on by greggdixon@voltus.co

Last week we kicked off our multi-week Vlog series dedicated to unmasking some of the little known tips and tricks of the demand response market.

We started by explaining how easy it is to eliminate capacity charges through Voltus’s Peak Saver program. Peak Saver is an out-of-market, peak shaving program that leverages Voltus’s real-time, cloud-based technology platform. Peak Saver has the potential to more than double your demand response dollars when combined with traditional in-market programs. Who doesn’t like more cash?

But wait … in-market? Out-of-market? What is the difference between these approaches to turning operational flexibility into cash? Read on to learn more.

#2 – In-Market vs. Out-of-market Demand Response

When most people think demand response (DR), they think FERC-regulated programs that only exist in the wholesale energy markets of the US and Canada. ISO-NE, NYISO, PJM, MISO, ERCOT, SPP, and CAISO, as well as IESO and AESO in Canada, have demand response programs that focus on procuring reliable generation capacity, as well energy and ancillary services. Each market has its own variations, but all “in-market” demand response programs are subject to strict market-specific rules and a decent dose of regulatory risk. These programs are constantly evolving, but offer significant cash payments to market participants who commit their negawatts to meet program criteria.

Voltus has created “out-of-market” Peak Saver programs, bringing cash savings opportunities to every region in the US and Canada. Peak Saver leverages VoltApp, our real-time energy technology platform, to predict peak hours, eliminate capacity charges, and lower electric bills by up to 30%. Because there are no strictly defined market rules, there is also no barrier to entry for these programs. Commercial, industrial, and institutional customers can stack in-market and out-of-market demand response programs increasing their net earnings.

To demonstrate the relative value of in-market and out-of-market DR, let’s break it down by looking at the the value of 1 MW of curtailment in AEP Ohio. In the chart below, “in-market” opportunities – Emergency Load Response Program (ELRP), Synchronized Reserves Program (SRP), and the Gross-up (more on that in coming weeks) – represented in green, account for only 28% of the potential value of that MW of curtailment. Voltus’s “out-of-market” PJM program, represented in blue, allows consumers to not only reduce their generation capacity charges (the other side of the coin of in-market demand response revenue) but also transmission capacity charges. In this example, the out-of-market demand response opportunities account for 72% of the value, more than doubling this company’s net demand response dollars.

There are some important trade-offs to consider when optimizing the cash earned from these approaches. First, an energy consumer can benefit from implementing both of these approaches, but typically for only one season. In-market programs limit a customer’s ability to enroll by their peak load contribution value. The value of your peak load contribution is reduced when you participate in out-of-market peak shaving programs, eroding your ability to benefit from the in-market program.

Operationally speaking, in-market demand response programs have a different operational profile than out-of-market programs, summarized in the table below comparing PJM’s ELRP program with Peak Saver. In-market programs historically require fewer hours of annual response. However, with substantially more challenging performance requirements that are fully implemented in 2020, PJM’s ELRP program requires a 24/7/365 response requirement with advance notice of 30 minutes and an unlimited number of potential response hours. Of course, it’s very difficult to predict just how much PJM’s ELRP program will be called under new program requirements. On the other hand, out-of-market demand response in PJM likely requires more actual response hours each year, but the predictability of program requirements is clearer. With about 30 hours of highly predictable curtailment coupled with very clear and easy operational requirements, capturing out-of-market demand response value is often a better approach than in-market demand response alone.

There are additional nuances to comparing the two approaches (out-of-market vs. in-market) and stacking multiple demand response value streams (up to seven distinct programs in Pennsylvania, for instance) requires even deeper consideration. We can help you navigate the host of options. Chat with us below or email us at info@voltus.co

#3 – Incremental Auction Sell-Off

How to avoid absorbing the in-market risk from your demand response service provider … more to come on Thursday, 3/12.

Week #1 – Getting the Most Cheese from Demand Response: Eliminating Capacity Charges

Posted on by greggdixon@voltus.co

A few weeks back we dropped somewhat of a bombshell by declaring that Demand Response in PJM, as You Know It, Is Dead. Of course, this was meant to be a bit provocative with the goal of drawing attention to a better way of capturing the value of demand response in the rapidly evolving and controversial PJM market. During our webinar we explained why demand response in PJM is, in fact, more valuable than ever for commercial and industrial loads that leverage Voltus’s out-of-market DR program – Peak Saver – in addition to traditional in-market programs. Our webinar stirred dozens of questions, many of which we didn’t have time to cover in full detail during the webinar.

This multi-week Vlog series is dedicated to answering those questions with a bit more detail, while extending many of the concepts covered in the webinar into other markets. The goal here, as always, is to help customers turn their operational flexibility into the most cash possible wherever they have operations.

#1 – Eliminating Capacity Charges

Did you know that about 30% of your annual electricity bill comes from the electricity you use during one to five peak hours of the year? Generation and transmission demand or capacity charges (dubbed – TransCap and GenCap) are not only on the rise, but are accounting for a larger portion of large energy consumers’ electric bills over time, which means there’s a growing opportunity to reduce expense.

If you could reduce or eliminate your load during those same peak hours, you can eliminate or reduce a significant portion of your annual electric bill. Put differently, would you be willing to reduce electricity demand for 0.5% of the hours of the year to potentially reduce your annual energy bill by 30%? If the answer is, “Yes!” then we can show you how.

Voltus’s Peak Saver technology platform (VoltApp) helps to eliminate capacity charges by predicting peak load hours, instructing customers to curtail during those hours, measuring your load reduction in real-time, and verifying the savings on your electricity bill to ensure that the savings are captured. We manage this program no differently than a typical demand response program that you may have part.

Peak shaving is often operationally better aligned with a customer’s ability to curtail load or use behind-the-meter assets like onsite generation. Combining traditional in-market demand response programs with our out-of-market Peak Saver program has been proven to more than double the dollars a customer gets from demand response.

Interested in learning more? Chat with us below or email us at info@voltus.co

#2 – In-Market vs. Out-of-Market Demand Response

We’ll delve deeper into these terms and provide clarity on what programs exist in different geographic regions . . . stay tuned for the details on Thursday, 3/5!

New Year’s Resolution – Double Your DR $s with Voltus – Guaranteed!

Posted on by greggdixon@voltus.co

Our experts want to help you with a single new year’s resolution: double your dollars in demand response in 2020 with these five tips:

  1. Jon Wellinghoff, former Chairman of the Federal Energy Regulatory Commission and “Father of Demand Response”: “In New York City, Texas, and all of PJM, you’ll want to ‘stack’ multiple demand response programs. If you’re only in one program, you’re missing out on many new programs. I’m aware of up to six programs being stacked at a single facility in Pennsylvania!”

  2. Ed Sayers, Vice President of Energy at Simon Property Group: “Optimize your enrolled kW. DR works off of a simple formula: kW x $’s = earnings. Squeeze every kW you can by reevaluating your operational flexibility and enrollment levels. As you invest in energy controls or new equipment you’ll often find that you can enable more kW, with quicker response times. That’s more cash.”

  3. Alex Laskey, founder and former President of Opower: “For American businesses, transmission capacity charges are increasing significantly. Too few companies manage these, but doing so will help you double the value you’ll get from curtailing loads. For Canadian businesses, spend a little money to reduce your Global Adjustment charges. Those fees are simply too large to manage without expert advice.”

  4. Dennis Quinn, General Manager of CashGen at Voltus: “Get back your backup generator. The opportunity to use your generator in demand response programs has returned. These resources are the highest quality power for your facility and a high quality type of demand response.”

  5. Phil Giudice, former Commissioner of the Massachusetts Department of Energy Resources and CEO of Ambri: “Demand response continues to grow, so understand every program available to your facility. For example, the Southwest Power Pool now offers demand response. Illinois customers have access to a lucrative, quick response demand response program. And customers in Ohio have more demand response choice than ever before.”

Are you resolved to double your dollars in demand response in 2020? Email us for a detailed review of your portfolio (info@voltus.co – not .com) and we’ll show you all the options to guarantee you hit that New Year’s resolution.

Crush Global Adjustment Charges While Banking Toonies!

Posted on by greggdixon@voltus.co

If you’re like most commercial and industrial energy consumers in Ontario then you’re well aware of the expense of global adjustment charges on your electricity bill. You’re probably also aware that you can reduce these expenses if you’re able to predict when these charges are allocated on your bill. The expected annual expense for global adjustment charges is now over $600,000 per MW per year of peak demand, which is the average of your electricity demand during the five highest IESO system peak hours. That amounts to the highest capacity prices in the world . . . all the more reason to do everything you can to mitigate those expenses. If you’re interested in, and operationally able to, reduce demand to avoid these expenses then you’re also a perfect candidate to layer on additional value from IESO’s demand response program where you’re paid to be part of the energy market that procures capacity to satisfy Ontario power needs.

This webinar will focus on state-of-the-art methods, technologies, and secrets to crushing your global adjustment charges while hauling in as many toonies as you can through IESO’s demand response program! Sign up below and we’ll send you early January webinar dates and times for you to choose from.

Webinar Invite

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Only 10% of Passengers Allowed to Uber in Michigan

Posted on by greggdixon@voltus.co

Imagine reading that headline as you land in Detroit Metro an hour before a big meeting in Ann Arbor. Your heart sinks knowing you might need to wait in line for a taxi and likely be late for your meeting. Why would Michigan decide to limit your access to an innovation that you’ve become universally accustomed to using every time you arrive in any airport around the country? Ridesharing saves significant time and money and gives you peace of mind that travel will go smoothly, without having to experience the universally terrible service of the outdated taxi. And how the heck are they supposed to enforce the 10% cap fairly?!?

You would be understandably gobsmacked if you experienced this hypothetical situation. Yet, that’s exactly what the Michigan Public Service Commission (MPSC) has decided is right for its customers . . . whoops, I mean ratepayers . . . as it relates to one of the most innovative energy sources lying fallow in Michigan, namely demand response, a resource that would save Michigan customers more than $260 million per year immediately. The same 10% cap that the MPSC has imposed on customers choosing an alternative energy supplier is arbitrarily imposed on those who would like to deliver to Michigan the very local resource that the MPSC has stated is desperately needed to address Michigan’s electricity needs. Demand response offers the promise to deliver more than 2,700 MWs of Michigan’s local resource requirement to meet peak electricity demand. These MWs are the least expensive, most reliable on-peak, and undeniably cleanest local resource available to Michigan today.

Let’s look at the dollars and sense:
  • Michigan currently pays an MPSC-approved, weighted average of $105,241 per MW per year for capacity to its regulated utilities. Michigan peak demand is approximately 20,828 MWs of which 90% is delivered through regulated utilities. Again, the MPSC allows 10% of customers to choose an alternative energy supplier that offers competitive prices for capacity which have historically been far less expensive than the cost of regulated utility capacity.
  • Yet, Michigan has chosen to be part of a federally-regulated wholesale electricity market called MISO (the Midcontinent Independent System Operator) that delivers the shared economic and reliability benefits of an interconnected transmission system serving 15 states. This was a very wise choice by the MPSC because it provides Michigan with access to some of the least expensive and most reliable power in the world. Unfortunately, Michigan isn’t taking full advantage of it because of the limitations the MPSC imposes on access to innovations like demand response.
  • The Michigan zone of MISO attracts capacity into its market at a rate of $8,870 per MW per year. That’s a savings of nearly $100,000 per MW per year, or nearly $2 billion per year in total, for Michigan customers if Michigan were to rely on MISO entirely for its capacity. Opponents of this viewpoint will interject here and say, “Wait, the auction run by MISO is a residual market, so if Michigan relied entirely on MISO to meet its capacity needs then that price would be much higher,” to which we would retort . . . you’re right. But there’s 2,700 MWs of local capacity in the form of demand response that Michigan can and should allow to meet its capacity needs and the immediate savings unlocked from doing this would equate to 2,700 MWs x ($105,241 – $8,870) = $260 million per year in savings to customers or $68.73 per Michigan household.
  • What’s more, the Michigan commercial and industrial customers who would deliver the 2,700 MWs of on-peak capacity, locally, would receive those payments, further stoking the fire of the Michigan economy. In fact, every Michigan competitive choice customer can and should take advantage of this opportunity right now, but 90% of Michigan customers cannot. So, who wouldn’t want these benefits?

Michigan utilities say no to these benefits and the MPSC goes right along with them. Michigan regulated utilities oppose demand response being fully unlocked in the state of Michigan unless they’re the ones being paid for it. The most galling part of this ruse is that the utilities are paid the MPSC-regulated rate for capacity for their demand response MWs while paying a fraction of it to their customers. In the case of Consumers Energy their demand response program pays $25,000 per MW per year to their customers (while passing through unnecessarily onerous penalties and operational requirements) . . . and the MPSC allows them to pocket the difference. Perhaps most stunning of all is that when Michigan regulated utility demand response is asked to actually deliver its capacity it performs at about 60% (put differently, the regulated price of capacity being paid to utility demand response is actually $105,241/60% = $175,402, which is the highest price paid by a state for capacity in the country).

Yet, to its credit the MPSC has taken up the challenge of unlocking the benefits of demand response. It has made progress. But the progress is slow and bogged down in politics while Michigan customers await their taxi in a long line, likely missing the meeting that they came to Michigan for in the first place. The MPSC can and should immediately lift the 10% cap on demand response, treating it differently than competitive retail supply, and deliver $260 million in annual savings to customers. Dozens of other states have done just that while unlocking billions of dollars in proven annual savings to customers, improving grid reliability, and ensuring a cleaner energy future for their communities.

Let’s go!