ASHRAE Journal - November 2013 - B24

and to curtail loads rather than set new
peaks. Commonly, this capability saves
more money than that generated by participating in formal programs. It's a great
example of how better knowledge of how
the electric grid works can produce significant improvements to the bottom line.
We've only begun to tap this potential.

Changes in Rate Structures
There was a time when utilities, like
any retailer, encouraged increasing use
of their product. Rate structures frequently offered tiered discounts as usage
increased. Today, the opposite is more
likely. Depending on location and vendor, large energy users may pay a flat rate,
a demand charge, a tiered rate, a time
of use rate, or combinations of those.
There are thousands of rate structures
across the U.S. Their purpose ranges
from encouraging conservation to local
economic development. Some rates have
nothing to do with electricity consumed.

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B24

This is changing rapidly influenced by
renewable energy, emission controls,
electric vehicles, grid constraints, and a
host of other new realities.
Consider the mix: generators conclude
that retrofitting coal plants to meet new
emissions standards is too expensive,
so they close the plants. Nuclear safeguards and permitting are too expensive,
so large numbers of future plants are
dropped. As current plants require maintenance, they are closed. The remaining
generators charge more, knowing there
aren't many alternatives.
Natural gas generators have replaced
most of the closed plants, aided by the
relative ease of construction and the incredibly low price of gas. The problem is
that gas pipeline planners never expected
the current situation, so there are limits
to the amount of gas the pipelines can
deliver. As power plants require more,
the cost of delivery rises causing cheap
gas to become expensive.
After the cost of generating, there is
the cost of delivering those electrons.
At peak loads, delivery is constrained so
costs shoot way up. The concept is that
increased revenue will fund investments
in infrastructure. Unfortunately, no one
wants that infrastructure in their back
yard, so it isn't being built.
These things are a reality now. Customers don't see price volatility because
traditional rate structures mask it. Ideally, the rates charged will somehow approximate the averages of the volatile
price the utilities actually experience,
and there are large and expensive staffs
to make sure of it as long as they guess
right. When they guess wrong, the result
can be anything from a blackout to financial instability. Navigating these waters
is only more difficult as the physical intermittency of renewable energy enters
the mix.
In response, the trends are toward
increased customer exposure to true
real time pricing. This may encompass
a fixed range from x to 10x, or it may
mean paying true energy prices plus delivery charges. Today, average energy
costs, including delivery, range from
7 cents to 20 cents per kWh (higher in
Hawaii). At the wholesale level histor-

B A C n e t ® t o d Ay A n d t h e S m A rt G r i d | A S u p p l e m e n t t o A S H R A E J o u R n A l

ic highs have reached 100 dollars per
kWh exclusive of delivery. That's an extreme, but it serves as a warning to pay
attention to energy and to have a plan
to manage it. Fortunately, a number of
trends on the customer side can answer
the challenge.

Emerging Trends in the Smart Grid
Permanent is becoming only a bit
longer than temporary in today's utility
world. The industry faces rapidly shifting social norms coupled with an infrastructure that takes decades to plan,
permit and build. The nuclear "renaissance," only five years old, now consists
of mostly cancelled projects.
The real renaissance is in gas-fired
generation, but the pipeline infrastructure isn't there to handle this new demand. The result? Generation prices
are increasing even as fuel prices drop.
Utilities are responding by trading some
of their engineering culture for sophisticated risk managers and more robust
forecasting tools.
Smart customers will do the same.
The most attractive Class A space will
have little value without the electricity to
power it. A number of emerging trends
on the customer side will help prevent
this outcome.
First, demand response is becoming
much more sophisticated, and being
matched with new customer side capabilities. This recognizes that the most
reliable energy is steady-state energy.
Customers who can shave peaks and fill
valleys in their energy demand profiles
will see rewards in lower overall costs of
that energy. Preconditioning of air has
been done for years, but now it is being
coupled with more sophisticated building models.
Rather than following a blind assumption that a 4 a.m. HVAC start will avoid
afternoon demand, newer systems are
able to use real-time electric meter data
and couple that with weather forecasts,
24-hour energy price curves, outside air
use, scheduled DR events or forecasted
demand peaks to create a rolling 24-hour
schedule of HVAC settings that are always optimized for external and internal
conditions. This may not avoid setting
n ovem Ber 2013

ashrae.org



ASHRAE Journal - November 2013

Table of Contents for the Digital Edition of ASHRAE Journal - November 2013

Contents
Commentary
Industry News
Letters
Meetings and Shows
Feature Articles
Sequencing & Control of Compressors
Fire Station Renovation
Sewage Plant Heats Village
Standing Columns
Engineer’s Notebook
Building Sciences
Special Supplement
BACnet Today & the Smart Grid
The Performance Gap
Refrigeration Applications
InfoCenter
Energy Modeling
Emerging Technologies
Data Centers
People
Products
Special Products
Geothermal for Big Box Retail
Classified Advertising
Advertisers Index
ASHRAE Journal - November 2013 - Intro
ASHRAE Journal - November 2013 - Cover1
ASHRAE Journal - November 2013 - Cover2
ASHRAE Journal - November 2013 - 1
ASHRAE Journal - November 2013 - 2
ASHRAE Journal - November 2013 - Contents
ASHRAE Journal - November 2013 - Commentary
ASHRAE Journal - November 2013 - 5
ASHRAE Journal - November 2013 - Industry News
ASHRAE Journal - November 2013 - 7
ASHRAE Journal - November 2013 - 8
ASHRAE Journal - November 2013 - 9
ASHRAE Journal - November 2013 - Letters
ASHRAE Journal - November 2013 - 11
ASHRAE Journal - November 2013 - Meetings and Shows
ASHRAE Journal - November 2013 - 13
ASHRAE Journal - November 2013 - Sequencing & Control of Compressors
ASHRAE Journal - November 2013 - 15
ASHRAE Journal - November 2013 - 16
ASHRAE Journal - November 2013 - 17
ASHRAE Journal - November 2013 - 18
ASHRAE Journal - November 2013 - 19
ASHRAE Journal - November 2013 - 20
ASHRAE Journal - November 2013 - 21
ASHRAE Journal - November 2013 - 22
ASHRAE Journal - November 2013 - 23
ASHRAE Journal - November 2013 - 24
ASHRAE Journal - November 2013 - 25
ASHRAE Journal - November 2013 - 26
ASHRAE Journal - November 2013 - 27
ASHRAE Journal - November 2013 - 28
ASHRAE Journal - November 2013 - 29
ASHRAE Journal - November 2013 - Fire Station Renovation
ASHRAE Journal - November 2013 - 31
ASHRAE Journal - November 2013 - 32
ASHRAE Journal - November 2013 - 33
ASHRAE Journal - November 2013 - 34
ASHRAE Journal - November 2013 - 35
ASHRAE Journal - November 2013 - 36
ASHRAE Journal - November 2013 - 37
ASHRAE Journal - November 2013 - 38
ASHRAE Journal - November 2013 - 39
ASHRAE Journal - November 2013 - Sewage Plant Heats Village
ASHRAE Journal - November 2013 - 41
ASHRAE Journal - November 2013 - 42
ASHRAE Journal - November 2013 - 43
ASHRAE Journal - November 2013 - 44
ASHRAE Journal - November 2013 - 45
ASHRAE Journal - November 2013 - 46
ASHRAE Journal - November 2013 - 47
ASHRAE Journal - November 2013 - Engineer’s Notebook
ASHRAE Journal - November 2013 - 49
ASHRAE Journal - November 2013 - 50
ASHRAE Journal - November 2013 - 51
ASHRAE Journal - November 2013 - 52
ASHRAE Journal - November 2013 - 53
ASHRAE Journal - November 2013 - 54
ASHRAE Journal - November 2013 - 55
ASHRAE Journal - November 2013 - Building Sciences
ASHRAE Journal - November 2013 - 57
ASHRAE Journal - November 2013 - 58
ASHRAE Journal - November 2013 - 59
ASHRAE Journal - November 2013 - 60
ASHRAE Journal - November 2013 - 61
ASHRAE Journal - November 2013 - 62
ASHRAE Journal - November 2013 - 63
ASHRAE Journal - November 2013 - 64
ASHRAE Journal - November 2013 - BACnet Today & the Smart Grid
ASHRAE Journal - November 2013 - BCover2
ASHRAE Journal - November 2013 - B1
ASHRAE Journal - November 2013 - B2
ASHRAE Journal - November 2013 - B3
ASHRAE Journal - November 2013 - B4
ASHRAE Journal - November 2013 - B5
ASHRAE Journal - November 2013 - B6
ASHRAE Journal - November 2013 - B7
ASHRAE Journal - November 2013 - B8
ASHRAE Journal - November 2013 - B9
ASHRAE Journal - November 2013 - B10
ASHRAE Journal - November 2013 - B11
ASHRAE Journal - November 2013 - B12
ASHRAE Journal - November 2013 - B13
ASHRAE Journal - November 2013 - B14
ASHRAE Journal - November 2013 - B15
ASHRAE Journal - November 2013 - B16
ASHRAE Journal - November 2013 - B17
ASHRAE Journal - November 2013 - B18
ASHRAE Journal - November 2013 - B19
ASHRAE Journal - November 2013 - B20
ASHRAE Journal - November 2013 - B21
ASHRAE Journal - November 2013 - B22
ASHRAE Journal - November 2013 - B23
ASHRAE Journal - November 2013 - B24
ASHRAE Journal - November 2013 - B25
ASHRAE Journal - November 2013 - B26
ASHRAE Journal - November 2013 - B27
ASHRAE Journal - November 2013 - B28
ASHRAE Journal - November 2013 - B29
ASHRAE Journal - November 2013 - B30
ASHRAE Journal - November 2013 - The Performance Gap
ASHRAE Journal - November 2013 - 66
ASHRAE Journal - November 2013 - 67
ASHRAE Journal - November 2013 - 68
ASHRAE Journal - November 2013 - 69
ASHRAE Journal - November 2013 - 70
ASHRAE Journal - November 2013 - 71
ASHRAE Journal - November 2013 - 72
ASHRAE Journal - November 2013 - Refrigeration Applications
ASHRAE Journal - November 2013 - InfoCenter
ASHRAE Journal - November 2013 - 75
ASHRAE Journal - November 2013 - 76
ASHRAE Journal - November 2013 - 77
ASHRAE Journal - November 2013 - 78
ASHRAE Journal - November 2013 - Energy Modeling
ASHRAE Journal - November 2013 - Emerging Technologies
ASHRAE Journal - November 2013 - 81
ASHRAE Journal - November 2013 - 82
ASHRAE Journal - November 2013 - 83
ASHRAE Journal - November 2013 - Data Centers
ASHRAE Journal - November 2013 - 85
ASHRAE Journal - November 2013 - 86
ASHRAE Journal - November 2013 - People
ASHRAE Journal - November 2013 - Products
ASHRAE Journal - November 2013 - Special Products
ASHRAE Journal - November 2013 - Geothermal for Big Box Retail
ASHRAE Journal - November 2013 - 91
ASHRAE Journal - November 2013 - 92
ASHRAE Journal - November 2013 - 93
ASHRAE Journal - November 2013 - 94
ASHRAE Journal - November 2013 - Classified Advertising
ASHRAE Journal - November 2013 - Advertisers Index
ASHRAE Journal - November 2013 - Cover3
ASHRAE Journal - November 2013 - Cover4
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