Smart Thermostats Help Southwest Co-ops Save

New technology helps reduce demand and contains costs

thermostatBy Magen Howard

A new program launched by Arizona G&T Cooperatives has the potential to be a win-win-win. As the power production, transmission, and energy services provider for electric and water utilities in Arizona, Nevada and California, AZGT’s primary goal for the program is to reduce electricity demand during peak times and help keep energy prices lower for all members.

The smart thermostat program gives consumer-members of participating electric co-ops a free or discounted smart thermostat and an annual bill credit. In exchange, consumer-members agree to slight adjustments to their temperature settings at times of the highest electricity demand, when power is most expensive. “With markets in short supply of extra energy, our hope is to reduce how much energy capacity we’re required to have available during periods of high demand,” says Tyler Pearce, AZGT operations engineer. “When demand is high, the incremental cost for additional power is quite high.

High demand and low power supply means members will pay inflated prices for their energy.” AZGT kicked off the new program with Graham County Electric Cooperative in Pima, Arizona. “We were looking for a good program to replace old energy-efficiency programs that were not working for a variety of reasons,” says Phil Cook, GCEC’s CEO/general manager. “This program allows members to be involved and have control over their devices.” The temperature setting is slightly raised for a few hours on hot and humid summer afternoons or lowered on cold winter mornings, no more than 30 times in one calendar year. Reducing demand offsets the co-op’s power capacity requirements during peak hours and helps lower costs for everyone. The cooperative never has full control of the thermostat. The consumer-member can always override the high-demand adjustment event. But if GCEC members participate in at least 65% of the total event hours, they’re eligible for an annual bill credit. “The smart thermostat program is designed to minimize the inconvenience and discomfort of the participant while offering them an incentive for helping us reduce electricity demand,” Tyler says.

When anticipating a high-demand event during the summer, the thermostat is first adjusted down 2 degrees from its current setting to pre-cool the home for an hour. After the first hour, the thermostat is adjusted upward 2, 3 and 4 degrees from its original setting during the second, third and fourth hours of the event. “It’s during those hours that we hope to shave electricity demand,” he says. “The air conditioner still operates, but it’ll operate less than it ordinarily would to conserve electricity.” MEC While the adjustment events themselves won’t necessarily save money on participants’ electric bills because of the pre-cooling and pre-heating hour, studies have shown that a properly installed and configured smart thermostat can save consumers up to 23% on heating and cooling costs during normal operation. “It was important to us that we create a program that is also a tool for members, giving them quality data to help manage their heating and cooling costs and decisions on how they use electricity,” Phil says. “The smart thermostat program accomplishes that while working toward the greater goal of reducing the risk of power outages across the state when energy demand hits extreme levels.” By Co-ops, for Co-ops The software that enables the remote thermostat adjustment by GCEC was developed in cooperation with Central Electric Power Cooperative Inc., a generation and transmission cooperative serving nearly 30 electric distribution co-ops in South Carolina. The partnership between CEPCI and Arizona G&T Cooperatives exemplifies the sixth cooperative principle of Cooperation Among Cooperatives, says Ben Engelby, AZGT’s general counsel.

Sharing information and technology is a direct benefit to AZGT and CEPCI members and the consumers they serve. It permits small co-ops to offer the same energy-saving programs that larger utilities can afford. “It’s a solution created by a cooperative for cooperatives,” Ben says. “CEPCI understood that the current solutions in the marketplace didn’t fit the cooperative model. They also understood the importance of giving cooperative members the opportunity to manage and control their participation. We wanted to do the same: provide a low-cost program that’s easily managed by all of our member cooperatives with benefits for all of our consumers.” With the pilot at GCEC off the ground, AZGT will offer the smart thermostat program to its other member cooperatives in the Southwest. The software can also enable other energy-saving programs in the future. “We have been talking about and working on this program for about two years, and I’m excited to see this move forward for GCEC and hopefully other co-ops in our state,” Phil says.