Responsive Economic Dispatch: Meeting a New Goal for Power

Customization is what we expect from our coffee order, not something we associate with an electricity plan. But like other industries influenced and motivated by the Internet of Things (IoT) age, the energy industry is having a renaissance that is changing customers’ relationship with power.

Customers want their electricity to do more than keep the lights on. Business customers specifically, are constantly looking to get the most from their plan, striving to meet various business needs, including budgetary, operational, and aspirational.

COMMENTARY

The RED program is one way NRG business customers are getting more. The program, which stands for Responsive Economic Dispatch (RED), provides C&I customers with the opportunity to customize their plans by enrolling in a flexible curtailment program.

The program has been an incredible win for some of our customers, particularly independent school district (ISD) systems.

RED—How it Works

A curtailment program that allows customers to earn money by monetizing their load flexibility with little to no disruption to their everyday operations, the RED program is a simple and easy solution for business customers.

Those enrolled offer to curtail their energy use during RED events, which often coincide with forecasted or real-time grid scarcity. However, what makes it unique from similar plans is its flexibility, which allows C&I customers to enroll in the RED plan that best fits their needs, capabilities, and conditions.

Those who enroll can lower costs, optimize spending, and receive a tailored solution that helps them get more from their power than ever before. We also provide market expertise and develop reduction action plans that detail ways to reduce energy usage and meet kW reduction commitments, helping customers feel confident about curtailing load.

RED Program in Action

Though there are a variety of businesses that have chosen to enroll in RED, the program has been especially beneficial for independent school districts, such as Fort Bend ISD, Dallas ISD, and Round Rock.

Looking for additional ways to supplement their annual district budgets, NRG took on the task of evaluating the most suitable program(s) for these districts, taking into consideration both their priorities and the resources they had on hand to determine the best solution.

To find the best fit, NRG looked at several key factors:

• As a school district, these customers needed to avoid disrupting operations.
• Many of these districts had previous experience with curtailment programs, which made adoption easier and minimized any learning curve involved in enrolling in a new curtailment solution.
• The ISDs also boasted flexible loads due to the size of their footprints, the breadth of their properties, and the limited time many of these buildings are active during the day.
• Several also had building management programs, which allowed them to easily track and control energy usage, making short-notice curtailment requests a viable option.
• The ISDs appreciated the voluntary nature of the program, which allowed them to balance economics with comfort.

Taking these factors into consideration, we knew RED was the perfect fit for these districts. The RED program would not only allow the ISDs to save on their electricity plans but earn money by curtailing at their own pace, with no risk to their budget. And yet, we knew we could make it even better.

Traditionally, program savings were given to participants as an invoice credit, but this was detrimental for the ISDs. So, we adjusted and now offer an alternative, a check payment.

Over the past four years, several school districts throughout Texas have been paid more than $670,000 through RED. These savings are available to provide additional resources to the students, i.e. books, support of programs, construction, and renovation, without adding another expenditure to the existing budget.

Win-Win-Win

At the heart of this program is an approach we believe is crucial to the energy industry. With the help of RED, instead of generating a MW, we’re saving a MW, and in doing so the program serves as a win-win-win for a variety of stakeholders.

For customers, the wins are more obvious. The RED program is additive, allowing customers to customize their energy plan and receive monetary returns for curtailing. Additionally, they gain these benefits without fear of penalties, which gives the customer flexibility regarding when and how they participate.

For NRG, volatility in the electricity market is always a risk for our business. We often serve as a cushion for our customers, filling in the gap between customers’ monthly bills and the high electricity rates that come with low generation or extreme weather. The RED program reduces the need to generate more power. When customers curtail, they reduce the load needed, which helps lessen costs while maintaining reliability for our customers.

For the grid, RED removes additional load when demand is at its peak. The electric grid can only access a finite supply of electricity at any time. While dispatchable generation, such as natural gas, can help alleviate some of this demand, increasing dependence on wind generation and severe weather can lead to scarcity events. Alternatively, with programs such as RED, we can optimize the MWs we do have, by curtailing unnecessary usage and allowing the capacity we do have to be deployed in areas of need.

Customized Energy is the Future of Energy

RED is an example of our desire to provide our customers with a unique experience that historically hasn’t existed in the energy industry.

For us, the future of energy is ensuring that power is reliable, sustainable, and customizable, allowing customers to find or create a solution that supports their success as well as a healthy grid.

We continue to evolve the RED and make fit-for-purpose products that give back to our consumers while making the grid more sustainable. As we continue to evolve as an organization, we are excited to mine new opportunities and unearth the diamonds that will help our customers get more from their power

—Scott Hart is Senior Vice President and Head of Sales for NRG Business.