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LADWP Approves First-of-Its-Kind Program Offering Incentives to Large Commercial Customers to Shift Energy Use, Help Avoid Outages

LADWP Approves First-of-Its-Kind Program Offering Incentives to Large Commercial Customers to Shift Energy Use, Help Avoid Outages
LOS ANGELES – The Los Angeles Department of Water and Power (LADWP) will offer a new energy saving program, called SummerShift, for large commercial and industrial customers to reduce the risk of outages this summer resulting from the limited availability of natural gas from the Aliso Canyon Natural Gas Storage Facility.

Approved today by the Board of Water and Power Commissioners, SummerShift will provide a monthly electric price incentive of $10.00 per kilowatt (kW) to participating customers for energy saved or shifted away from the critical hours of 3 p.m. to 5 p.m. on weekdays from July through September 2016. The program will go into effect immediately.

“With the current moratorium on new injections of natural gas from Aliso Canyon there is a heightened threat of outages this summer, especially during times of extreme heat when gas and electricity are in higher demand,” Board President Mel Levine said. “Customer participation in SummerShift will help minimize the risk of rotating outages, which could result in serious health and safety risks, as well as create financial impacts to our customers.”

LADWP has identified a potential savings of up to 1,000 megawatts (MW) if all 5,000 eligible medium and large commercial and industrial customers were to participate in reducing or shifting their electricity use away high demand, peak hours. If only 20 to 30 percent participated, it would save from 200 to 300 MW at an estimated cost of $3 million per month. Conversely, a power outage has a significant cost for all businesses. For example, a medium or large commercial or industrial customer could lose between $13,000 from a one-minute outage and over $84,000 from an eight-hour outage.

“We greatly appreciate our customers’ enthusiasm for this program and willingness to partner with us in reducing the risk of outages summer,” said General Manager Marcie Edwards. “We have introduced the program to several groups of large commercial customers over the past few weeks and received a positive response.”

Aliso Canyon plays an essential role in maintaining both natural gas and electric service reliability in the greater Los Angeles area. LADWP and other utilities serving the region depend upon this facility to maintain power reliability when energy use spikes during hot weather. Gas is used not only in homes and businesses, but is also primary fuel for gas-fired electric power plants. Aliso Canyon is the only gas storage facility that can immediately respond to rapid changes in gas supply for 17 gas-fired generating plants, including four generating stations operated by LADWP in the Los Angeles basin.

SummerShift is just one of several measures being undertaken by the utility to mitigate the risk of outages caused by the moratorium on gas injections into Aliso Canyon. Other measures include:

  • Making operational changes to maximize flexibility of gas-fired power plants to preserve natural gas for critical periods.
  • Maximizing use of alternative fuel sources, including renewable energy.
  • Public outreach to residential customers to reduce their energy use, and participate in Flex Alerts, such as the one issued Monday.
  • Expanding Demand-Response Programs to provide discounts for participating large commercial and industrial customers to reduce and shift their energy use away from peak periods.

Learn more about SummerShift and other Demand Response Programs at www.ladwp.com/drprogram. Learn more about LADWP’s outlook for summer electric reliability and other rebates and programs to help our customers save power and money at www.MyLADWP.com.

 

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