We will seek to cut peak load by 25% through increased enrollment in peak load management programs and real time pricing
Reducing our daily energy usage is critical to achieving our 30% carbon reduction goal and saving money on energy across the city.

But special measures must be taken to manage electrical power usage during the hottest days of the year, when air conditioners are running on high and our power usage is at its peak. At these times, our electric grid is strained and our oldest and least efficient plants must run to meet the city's demand. These power plants guzzle 62% more fuel and release 140% more CO2 than newer plants. They are also more expensive to run. Our new, natural gas power plants cost $74 to produce one MWh, while our oldest plants, which were designed in the 1960s and 1970s and run on oil, cost over $250 to produce the same amount of electricity.

Peak load management programs are one way to balance electricity supply with demand, reduce the strain on the grid and limit the use of the more expensive and often least efficient plants. The following initiatives could enable 25% of our peak demand to be shaved from the electric load.

We will seek to expand participation in peak load management programs through smart meters
In peak load management programs, customers agree to reduce their electricity load on the hottest days-either by using less electricity or by using alternative sources of generation. Participants are paid for enrollment and/or for responding during a peak event. Already, the customers enrolled can collectively reduce the city's peak load by appoximately 500 MW-or 4% of the peak electric demand in the city.

We can measure their impact because participants have installed a more sophisticated metering system that allows buildings to track their own energy use-and sometimes the energy consumption of individual tenants-in real-time. But these meters can be costly: a standard meter costs around $30, while smart meters range from $100 to $600.

Although enrollment has increased by 7% over each of the past three years, full participation is not realized due to the high cost of smart meters and the fact that entrance is mostly limited to the largest electricity consumers, such as large commercial and industrial buildings.

To overcome these challenges and allow for wider enrollment in the peak load management programs, the City will urge the PSC to approve Con Edison's plan to install smart meters in every building by 2014.

The City will work with NYPA and Con Edison on installing smart meters in all City-owned buildings before 2014. This could result in a 4% decrease in City government's peak energy usage, while reducing overall energy consumption by 5%. We will also challenge all other institutional, State, and Federal agencies located in the city to participate in peak load programs and increase their overall impact.

Progress (as of 4/22/08):
On September 7 and 28, the City filed testimony in the Con Edison Electric rate case supporting cost effective, rapid deployment of smart meters for all customers, which will help support expansion of real-time pricing (RTP) and peak load management. In addition to the current rate plan that will be in place until March 2009, Con Edison is expected to file in May 2008 an electric rate proposal for 2009 and beyond, and the city expects advanced meter issues will be addressed in that case. In addition, the PSC, in a separate proceeding in December 2007, directed Con Edison to proceed with large scale deployment of smart meters, beginning in the Borough of Queens and in Westchester County. That initial installation of smart meters will provide information to assist in the widespread use of advanced meters that the City advocates.

We will support expansion of real-time pricing across the city
Currently, consumers are able to make informed choices about when to use their cell phones; in peak times, they know that minutes will cost more than off-peak hours and can adjust their behavior accordingly. Although energy prices fluctuate just as much over the course of a day, this information is almost entirely unavailable to the vast majority of New Yorkers. (See chart above: Real-Time Pricing Impact on Electricity Consumption; see case study: Real-Time Pricing in New York)

If customers were able to see the costs of electricity at different times, they could make more educated decisions about when and how they use electricity throughout the day. This is known as Real-Time Pricing (RTP).

Although the State initiated a residential RTP pilot program between 2004 and early 2006, it has not provided incentives for any additional pilots since 2005.

The City will advocate for new incentives to expand RTP pilots in the city and encourage residential participation, with the goal of enrolling 50% of small businesses and residents by 2015. In addition, the City will push the PSC to mandate that 100% of medium and large non-residential customers enter RTP programs over the same time frame.

Progress (as of 4/22/08):
The deployment of smart meters enables greater participation in RTP across the city. Therefore, on September 7 and 28, the City filed testimony in the Con Edison Electric rate case supporting cost effective, rapid deployment of smart meters for all customers. In addition to the current rate plan that will be in place until March 2009, Con Edison is expected to file in May 2008 an electric rate proposal for 2009 and beyond, and the City expects advanced meter issues to be addressed in that case. The PSC, in a separate proceeding in December 2007, directed Con Edison to proceed with large scale deployment of smart meters, beginning in the Borough of Queens and in Westchester County. That initial installation of smart meters will provide information to assist in the widespread use of advanced meters that the City advocates, and will enable the use of RTP mechanisms by energy consumers.