Utilities experiment on the rural Northwest

Real-time response to demand could radically shift how the grid operates.


The northwestern Wyoming town of Bondurant, population 100, is little more than horse pastures punctuated by a handful of rustic homes, along with a lone restaurant, the Branding Iron Cafe, and, next door, the tiny post office. Postmistress Amy Joe Stern tries to keep the power bill down at this small rural facility. So she jumped at a chance to get a $15-per-month credit from Lower Valley Energy, the utility cooperative that serves roughly 26,000 homes and businesses in the area.

Lower Valley pays the Bondurant Post Office and some 500 other volunteer customers for allowing the utility to connect small gray boxes to their electric water heaters. Whenever electricity demand is highest across Lower Valley’s grid — usually in the morning, when office lights and work machinery flip on while home water heaters are still cranking after morning showers — the utility sends a signal over the power lines to the boxes, telling the water heaters, which are major power gulpers, to turn off until energy use drops.

It’s called demand response, and it represents a radical shift in the operation of the power grid. Traditionally, grid operators react to fluctuations in demand, or load, by throttling power plants and hydroelectric dams, ensuring that the amount of electricity they’re producing equals the amount their customers are using at any moment. With demand response, they can also react by adjusting the load, curbing customers’ energy use instead of, say, revving up a natural gas plant.

Most of today’s grid, however, is antiquated and “dumb.” Grid operators aren’t able to monitor what’s going on with it remotely and they often find out about outages only when they get irate phone calls. And the system’s not equipped to allow the type of interactive exchange mentioned above. Bondurant’s gray boxes are a small step toward making the grid “smart,” a broad term describing a grid equipped with two-way communication and computer monitoring capabilities. As these technologies are implemented, it could revolutionize the grid in the same  way that smartphones have replaced landlines. Lower Valley, together with 10 other utilities in the region, is part of an experiment called the Pacific Northwest Smart Grid Demonstration Project to see what that looks like.

Source: Pacific Northwest Smart Grid Demonstration Project

“It means having dramatically better real-time information about what’s happening on the grid,” says Lower Valley engineer Warren Jones. “In the future, a freezer, washing machine, or whatever, will look for times when wind power is being generated … and that’s when those appliances will operate. It sounds a little pie-in-the-sky, but I don’t think we’re far from there, really.”

Perhaps nowhere is the case for smart grid stronger than in the Pacific Northwest. For decades, the Bonneville Power Administration, the federal agency created to market the electricity produced by numerous large dams on the Columbia River, has bathed the region in cheap electrons, exporting the power to as far away as Montana, Wyoming and even Los Angeles. The system, including the transmission lines, substations, meters and monthly bills, was tuned to the steady hum of the dams. But growing demand for energy has bottlenecked transmission lines and pushed new energy generation, especially wind power, onto Bonneville’s grid.

As recently as the mid-2000s, Bonne­ville had virtually no wind power in its portfolio. Spurred on by federal tax credits, the industry has since boomed, and now Bonneville’s energy mix is more wind-heavy than any large utility in the country. “It’s a big deal,” says Lee Hall, then-Bonneville’s smart-grid and demand-response manager. Clustered around the Columbia River, where the wind often blows wildly at night but dies during the day, the turbines tend to produce power exactly when Bonneville doesn’t need it. Many times, the utility has had to shut them down entirely, unable to harness bursts of wind when there’s not enough demand for both hydroelectric and wind power. 

Bonneville, of course, wants to use all of that wind energy, “and the best way to do that is to use computer-based, automated responses” that can help shift consumer demand to those times when the wind turbines are producing the most power, Hall says.

When the Department of Energy in 2009 pledged $620 million for experimental smart grid projects, Bonneville invited utilities across the region to partner with it. Since 2010, the utilities have tapped their $89 million share of the funds to install more than 69,000 “smart meters” that send real-time energy usage information to the utility, replacing the old meters read monthly by roving utility employees. The new meters also allow the utilities to communicate with devices such as Bondurant’s gray boxes. Other devices, installed on transmission poles, automatically sense power outages on the grid and re-route the flow of electricity.

A Portland General Electric 5-megawatt, lithium-ion energy storage system, which will allow about 500 customers to tap into a power reserve during electricity disruptions.
Courtesy PGE

Bonneville also directed Battelle, the contractor that manages the project from the Energy Department’s Pacific Northwest National Lab, to simulate how an interactive, regional smart grid might work. Battelle calculates hypothetical prices of power based on factors like wind availability and broadcasts the signals to the utilities, which respond in a variety of ways. Portland General Electric, which tapped project funds to build a 5 MW battery bank (enough to supply about 500 homes for about 20 minutes), discharges the batteries when the signal says power is expensive and charges them when power is cheap.

For now, the effect of these experiments on the region’s energy use is minimal. Lower Valley and the other small utilities taking part in the project have only installed about 1,600 water heater controls, for instance. But already, the utilities are finding reasons to embrace some of the changes.

Flathead Electric Cooperative, which serves 48,000 members in northwestern Montana, signed up some 100 volunteers to try out dishwashers, washing machines and dryers that respond to the Pacific Northwest Lab’s price signal. An alert on a computer display in the volunteers’ homes tells them when peak power demand, and thus peak power price, hits. Appliances are programmed to respond. The dryer’s heating element will turn off while the clothes continue to tumble, for example, or the dishwasher’s heat cycle will pause until peak power passes. (The volunteer has the option of overriding these responses.) These little adjustments can reduce household energy use by more than 10 percent during those periods.

That difference adds up for Flathead Electric. Because much of the area lacks natural gas lines, residents tend to heat homes and water using electricity, which slams the grid on cold mornings. Bonne­ville, which supplies nearly all of Flathead Electric’s electricity, typically must respond to those surges in demand by throttling the turbines on its dams. To discourage those surges, Bonneville recently quadrupled the price it charges Flathead Electric when that utility’s power use spikes above a specified amount.

At a series of public meetings in rural Libby, Montana, Teri Rayome-Kelly, Flathead Electric’s demand-response coordinator, explained the new costs coming from Bonneville, and how the co-op was trying to flatten out peak load. The small, struggling town, once famous for asbestos mining, is the type of place one might expect resistance to smart meters and the like, with critics charging that they invade privacy or rob Americans of the freedom to run appliances whenever we want. But Rayome-Kelly didn’t have any problems getting volunteers. After all, what they’re really gaining is more control ­— over their power bill.