Utility Incentives for Automation Equipment Available for Water Agencies

Water agencies looking to enhance their ability to reduce energy demand during peak periods may be eligible for new incentive funds from California’s electric utilities.

The California Public Utilities Commission approved over $71 million in incentives earlier this year for control systems and upgrades that help businesses automate their participation in energy reducing demand response programs. Such programs provide the electric grid with relief during periods of peak energy demand, typically on hot days, and pay participating businesses ongoing incentives for standing by to periodically reduce their electricity consumption.

Since the ability to reduce load becomes even more valuable when it’s automated, the state’s investor-owned utilities (IOUs) are now offering up to $300 per kilowatt of automated load shed. As a result, an organization that can temporarily reduce its energy usage by 100kW would be eligible for up to $30,000 in equipment incentives.

Equipment such as new pump controls, SCADA system upgrades, variable frequency drives (VFDs) and other measures may qualify for reimbursement from the automated demand response (Auto-DR) incentive programs now available through Southern California Edison and San Diego Gas & Electric.  PG&E program rules are still in final approval stage and funds are expected to be available in the next couple of months.

To access funds, agencies must 1) request a preliminary assessment of their facility to determine what systems can be automated and what the associated load reduction would be; and 2) engage an engineering firm acting to perform the assessment and submit a list of requested equipment to the utility for review. Once approved by the utility, funds are reserved for up to 180 days and the agency can then begin to implement the measures, buying equipment and services to enable the automation measures.

Once the systems are installed and enabled, a request for funds is submitted and the IOU sends a contracted engineering firm to the water agency site to test the load shed and verify remote connectivity between the utility control room and the gateway device at the facility. Upon successful measurement and verification (M&V) of the load reduction, funds are released and the agency is reimbursed for up to 100% of the project costs.

In order to be eligible for these incentives, agencies must enroll in a qualified demand response program for 36 months. In addition, the rules will be changing in 2013 such that only 60% of the reimbursement will be delivered upon M&V, with the remaining 40% paid after one year of participation in a qualifying program. 

Funds are limited and available on a first come, first serve basis. ACWA’s Preferred Providers Program includes two demand response aggregators that can help member agencies apply for and access these funds. Read about them here.

ACWA members interested in learning more about control system incentives for water agencies are invited to register for a Sept. 5 webinar. Details can be found here.

For more information, contact Linda Anderson, 916.441.4545.