Sunday, January 05, 2014

Rating Energy Demand Bids for Water Department

The City of San Angelo received five bids for energy demand services. It sent out twenty requests for proposal for the following need.

The intent and purpose of this Request for Proposal (RFP) is to establish a term contract with one qualified firm to provide Demand Response Services to The City of San Angelo – Water Utilities Department. 

The City of San Angelo has the ability to curtail consumption of electricity or utilize on-site electricity generation capabilities for a few hours during the year and in so doing can provide a demand side resource to the local grid. The City of San Angelo seeks a qualified Demand Response Provider (“Provider”) to provide a mechanism for successful participation in demand response and a gateway to improved energy management at The City of San Angelo. 

Initially, The City of San Angelo would like to enroll into demand response the facility outlined in the Appendix A to this RFP (Water Treatment Department). The City of San Angelo will be open to enrolling additional capacity with the winning Respondent should the need or opportunity arise. 

Additionally, the City may consider expanding the services to other facilities, e.g., City Hall, CD Building, Annex, Convention Center, Coliseum, Business Resource Center, etc.;
Texas electrical generators pay energy users to cut demand during peak hours when electricity use is at or over capacity.  The City wants to participate in this program and will share a percent of revenue with the successful bidder.  The highest rated bidder is Energy Curtailment Specialists.  Their video (embedded above) shares how energy demand programs work.  The lowest rated bidder is the Texas General Land Office.

San Angelo is in the area served by the Energy Reliability Council of Texas.  Their website states:

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 23 million Texas customers - representing 85 percent of the state's electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 40,500 miles of transmission lines and more than 550 generation units. ERCOT also performs financial settlement for the competitive wholesale bulk-power market.
Competitive is not what comes to mind when peak wholesale energy prices will soar to $9,000 per megawatt hour in 2015 from $5,000 today.  They went from $3,000 to $4,500 in 2012.    A 200% increase in three years doesn't sound competitive at all.   

It does produce money, some of which could slosh around to the City's Water Treatment Department
This is a revenue sharing agreement vs. the shared savings proposal from ACAP Health.  I look forward to hearing the City Council presentation, especially any expected tradeoffs from participating in the program.

Update 4-12-14:  City Council will consider "awarding RFP: WU-20-13 Energy Demand Response Services to Energy Curtailment Specialists, Inc. of Buffalo, New York for a period of 5 years for a potential revenue of $163,720.30 annually and authorizing the City Manager or his designee to execute contract documents."  That's nearly $820,000 over five years.

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