When John Mycroft heard the pitch two years ago he was understandably wary. Representatives from Boston-based EnerNOC were telling the executive at Hexagon Metrology in North Kingstown that his company could get paid thousands of dollars a year by agreeing to reduce its energy consumption during peak times. Better yet, EnerNOC would pay to install the equipment necessary to participate in the program.
“In the beginning I was like, ‘There’s no way this can cost us nothing,’ ” Mycroft said. “I wasn’t very open to it, but then I started doing some research” on EnerNOC, a publicly traded company that today counts 71 customers across 123 sites in Rhode Island.
And since Mycroft, Hexagon’s director of environment, health and safety, and facilities, signed the company up, it has saved $15,000 a year between reducing energy consumption and payments Hexagon receives from EnerNOC for participating in the program. The results have been so impressive that Mycroft is urging management to expand the concept – known as demand response – to Hexagon’s other facilities.
The concept is relatively simple. Electricity grid operators pay EnerNOC to free up demand when the grid comes under pressure. When the load starts to spike, the regional grid operator sends an encrypted electronic signal to one of two EnerNOC network operations centers located in Boston and San Francisco. Automated phone calls and e-mails are sent to customers asking them to reduce their loads. If the company agrees, it either turns off energy-consuming systems or receives a signal over the Internet that automatically shuts off noncritical equipment.
In Hexagon’s case, the signal shuts down five of 10 air conditioning units on the factory floor, adjusts the air conditioning in offices and turns on a generator at the plant. The adjustment normally lasts no longer than two hours.
“We don’t have to lift a finger when that signal comes in,” Mycroft said. “Virtually no one in the facility usually can tell that it’s even happened.”
In New England, demand response occurs only when the grid is facing an emergency situation, said Gregg Dixon, senior vice president of marketing at EnerNOC. The region’s grid operator, ISO New England, has asked EnerNOC to reduce customer loads an average of two times a year during the past five years. During that time EnerNOC has called upon facilities that include the University of Rhode Island and supermarkets to respond. Nationwide, EnerNOC links to 5,450 facilities, including the Pentagon.
Companies participate to fulfill a pledge to be environmentally conscious or, more often, for the monetary payoff. Customers receive $25,000 to $30,000 a year for every megawatt they agree to take offline if the call comes. That translates to about $11,000 a year for the average customer that can free up 400 kilowatts, Dixon said.
And Dixon said many more Rhode Island customers could stand to benefit. He estimates penetration at only 30 to 40 percent of the demand-response market.
EnerNOC is contractually obligated to reduce the load by its previously pledged amount and knows how low each of its clients can go. If operators at EnerNOC control centers think the company can do better, they call and suggest steps to lower energy consumption.
“They don’t need to know anything about technology,” Dixon said. “We keep it extremely simple for them.” •
