updated 6/9/2005 12:12:30 PM ET 2005-06-09T16:12:30

James and Jeanne Wallace are just two of the 13 million people served by Southern California Edison, and compared with any nearby factory or department store, their air conditioner really isn’t much of strain on California’s capacity-challenged power grid.

The Wallaces also belong to a more elite group: 145,000 customers who figure prominently in the electric utility’s preparations for the hot summer months.

These people have given the company permission to shut down their air conditioners for short intervals whenever energy usage peaks toward capacity. Collectively, these homes can “generate” nearly 300 megawatts of electricity, equivalent to about a third of the output of many power plants.

An office building or a shopping mall typically consumes thousands of times more electricity than any single home, which is why many utilities offer big incentives to businesses to cut back during peak hours.

But power companies also see power in numbers. Many states and utilities see these residential drops in the bucket as a critical cushion, even if they can’t prevent a major outage like the Northeast blackout in 2003.

“You’ll find that (home systems) can respond pretty quick, as opposed to a manufacturing plant, which needs hours to crank something down,” said Ross Malme, chief executive of Retx Inc., a provider of energy communications technology. “The faster a consumer can respond to an event, the more valuable they become.”

Conservation programs like SoCal Edison’s are hardly new. At least 5 million U.S. homes are enrolled in such programs, some of which have been around since the 1970’s. Interest waned, however, until soaring demand, rising prices and the major outages of recent years exposed the system’s vulnerability.

“There’s hardly a state out there that’s not looking into doing something,” said Lynn England, CEO of Good Cents Inc., which helps utilities design and run demand-reduction programs.
People who sign up let their utility install a small device with which the company can remotely control their central air conditioning units and swimming pool pumps, another major power drain.

The compensation for this sacrifice is rather modest, often no more than $50 to $100 worth of energy savings, bill credits and rate reductions during a typical summer.

“I don’t think you should use the word sacrifice because there’s not much sacrifice involved. Maybe a little inconvenience,” said James Wallace, 74, a retired attorney and customer of SoCal Edison, a unit of Edison International Co.

“If it gets too hot I’ll go sit in my car,” Wallace joked.

He hardly notices the brief interruptions. And it’s a better option, Wallace said, than the rolling blackouts during California’s energy crisis in 2001.

Residential conservation also lets utilities avoid buying extra power to cover shortages. Excess capacity can cost several times the normal price in the wholesale market, and that expense can trickle down to consumers.

In New York, energy officials and utilities are expected to outline a plan this summer to add 300 megawatts to the state’s capacity through nontraditional means, including demand reduction.
Though New York offers sizable financial incentives for large businesses to conserve, residential programs remain limited, and could serve as a major untapped resource toward the 300-megawatt goal.

About 2,000 major businesses are already on call to cut a combined 1,500 megawatts of power use under New York’s existing programs, according to the New York Independent System Operator, a non-for-profit body that oversees the state’s transmission systems and the conservation efforts.

By contrast, in the New York City metropolitan area, about 38,400 homes, small businesses and religious institutions served by the Long Island Power Authority and Consolidated Edison Inc. are enrolled in pilot programs, representing 47 megawatts of power that can be turned off in a pinch.

That’s tiny compared with older programs run by SoCal Edison, Florida Power & Light Co. and Minneapolis-based Xcel Energy Inc. Florida Power, a unit of FPL Group Inc., has 718,000 of its 4.2 million customers enrolled in its On Call program, offering potential demand reduction of 780 megawatts. About 295,000 of Xcel’s 1.5 million customers in five midwestern states are signed up for the Saver’s Switch program, providing a cushion of 419 megawatts.

Since most consumers pay a set rate for electricity, there’s little immediate gratification from conservation beyond civic pride.

The LIPA and ConEd programs don’t offer any discounts or credits beyond an initial $25 payment, but they come with a technological feature that’s proven popular: users can go online and remotely adjust the settings on their thermostat if they forget to turn off the air conditioner or want to cool the house before arriving home.

Maryanne Rosenberg participates in demand-reduction programs in two locations. She has the LIPA device at her house in the Jericho section of Long Island, and has a second home in Margate, Fla., hooked up to the FPL system.

Once, when she was in Florida, Rosenberg needed to ask her nephew to get something at her house in New York. In advance of his arrival, she went online to make the temperature comfortable for him.

Now a regular user of the online controls, Rosenberg said she’s had no complaint on the rare occasions when either utility powered down her cooling, which she sees as necessary to avert brownouts.

“I haven’t really been disturbed by it at all,” said Rosenberg, who convinced her sister to sign up for the LIPA program.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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