BGE pushed air-conditioner cutoff plan too far

Baltimore Gas and Electric runs one of the most aggressive programs in the country to shut down customers' air conditioners on days when electricity is scarce and the grid is stressed.

BGE households found out how aggressive on Friday. On one of the hottest days in recorded Baltimore history, 72,000 residences were without air conditioning for at least six hours. BGE also used its radio-controlled switches to partially cut air conditioning for an additional 278,000 homes.

Many customers said they were entirely without air conditioning from late morning until after 8 p.m. on a day when the official temperature hit 106 and the air pollution index blew past the "unhealthy for certain groups" zone and into "unhealthy for everybody" territory.

BGE swears people who signed up for the cutoff plan, designed to save energy and keep the grid from overloading, should have known what to expect in exchange for their "Peak Rewards" bill credits.

"We have represented the program fairly," Mark Case, the utility's senior vice president for regulation and strategy, told this newspaper.

Here is how BGE represented the program. On some days — according to the company's "What is Peak Rewards?" Web page — "BGE will turn your air conditioning compressor off and on for brief periods (cycling) based on the cycling participation level that you choose." When that happens, "chances are you won't even notice when cycling is occurring and the only thing you WILL notice is the savings in your energy consumption and the credits to your bill!"

To judge from the 30,000 page views and hundreds of comments that my Peak Rewards blog posts have received since Friday, people noticed the cycling.

BGE did tell customers what would happen during any given hour of a shutoff "event." If you signed up for 50 percent cycling, your air conditioner would run only half as much as normal for that hour. Those opting for 75 percent cycling and bigger credits would see the AC operate a fourth as much. For people choosing 100 percent cycling and the biggest credits, it wouldn't turn on at all.

What BGE didn't say was that an "event" could last longer than it takes to watch "Lawrence of Arabia," "Dog Day Afternoon" and "Body Heat" back to back.

Many figured the shutoff period would go two or three hours at most. The word "cycling" suggests rotation among households — shutting me off for one hour and then my neighbor the next, for example.

"I'm surprised to hear you tell me people were turned off all day," says James F. Wilson, an independent energy economist and consultant based in Bethesda. "These programs exist in utilities all over the country. Usually the time when they really need the assistance is kind of from 3 p.m. to 5 p.m. They recognize that people are willing to be cut off for some period of time but not hour after hour after hour."

Anytime grid managers call for an emergency, mandatory reduction in peak demand, as they did Friday, BGE knew the "100 percent" Peak Rewards households could be shut down for up to six hours. The problem multiplied when BGE immediately initiated a second rationing period late Friday because of a substation problem and the potential instability of turning everybody back on at once.

Even people who signed up for 100 percent cycling were supposed to have their air conditioning partially running the second time. But at 7 p.m. and later, many told me, they still had zero cool. People had no idea they could be cut off for so long. They were frustrated they couldn't override the cycling. And they went crazy over BGE's clogged phone lines.

Electricity users from Virginia to New Jersey should thank BGE households for sacrificing more than anybody else to prevent Friday blackouts and brownouts.

Grid manager PJM Interconnection ordered a reduction of 2,300 megawatts in Mid-Atlantic electricity use. BGE delivered more than 40 percent of it — 971 megawatts, according to a PJM spokesman. Of that, households on the Peak Rewards plan were responsible for 600 megawatts, BGE said. That was more than any other utility contributed on Friday from residential, industrial and commercial users combined.

This is largely the result of BGE's persistent promotion of Peak Rewards, which in principle is a good program. No other utility in the country has signed such a high percentage of its household customers to its "demand response" plan, Case said in an interview.

(Full disclosure: I'm a 50 percent Peak Rewards member. Do participants include top executives at BGE and parent Constellation Energy? BGE President Ken DeFontes is a 50 percent participant, says company spokesman Rob Gould. Gould wouldn't say whether the Peak Rewards radio beams were shutting off Constellation CEO Mayo Shattuck's air conditioning on Friday or not.)

Peak Rewards cuts pollution, lowers energy bills and reduces the need for new investment. The alternative to Peak Rewards would be building a new power plant at far greater cost.

To grid managers making supply equal demand, a megawatt in turned-off air conditioners is the same as a megawatt of generated electricity. That means BGE gets millions in revenue for cycling its Peak Rewards customers. All of it is returned to households in the form of bill credits and other means, says Case.

But BGE has been too aggressive. It blew it on telling 100 percent Peak Rewards customers what to expect.

And given what happened Friday, the full-shutoff option may be too extreme for many households. Today's houses aren't built to operate without AC for that long. Senior citizens and asthmatics should never be on a 100 percent plan. The Public Service Commission ought to consider whether anybody should.

Conserving energy is a laudable goal. But canceling air conditioning all day for tens of thousands of households on the hottest day since 1936 is not the way to go about it.

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