As discussed in my previous post about the Texas energy crisis this past February, a major issue facing energy consumers today is that the cost of electricity is not straightforward like the cost of other items, i.e. groceries, gasoline, and restaurant meals. Typical electric bills show the amount of power used each month and the price of that power after it has been used. Although consumers rarely know the cost of their energy use in real time, they are responsible for paying the bill when it arrives.
Load sequencing panels (LSPs) are a new device that will change the way residential customers consume electric energy. LSPs will allow residential customers to track their energy use in kilowatts, kilowatt hours, or both, while monitoring the price of energy set by host utilities. This will allow consumers to accurately track their electric bills in real time.
Consumers will also be able to alter their consumption based on the cost of energy and their monthly budget for electricity. LSPs will be capable of reducing residential load by up to 40%, which is key when the cost of electric energy is high. Residents will also be able to simultaneously use all appliances when the cost of electric energy is low.
With the introduction of smart appliances, there are many opportunities to reduce energy consumption and electric bills. The approach outlined in this post is focused on a whole-building approach to energy reduction, where the LSP acts as the director for energy consumption. LSPs can be paired with smart appliances for optimization of electric energy use and cost.
LSPs will benefit host utilities in several ways; this will be the topic of a later post. However, before utilities can implement LSPs, traditional billing practices must be modernized.
Demand + Consumption Billing
KWH billing will not be a sustainable revenue stream for host utilities once distributed renewable energy sources become commonplace. Instead, demand-based billing where monthly bills include charges for maximum electric power demand in KW and consumption charges in KWH are needed. The basis for this billing structure is that electric utilities need to build lines and install transformers to serve the maximum 15 minute demand (KW) at any time.
In the demand-based rate structure, a utility could charge a $5 per KW infrastructure fee plus a consumption fee of $0.05 per KWH. This rate structure will provide electric utilities with a sustainable income stream of about $50 per month per customer, which will be used to maintain infrastructure while delivering reasonably priced electricity to consumers. This will result in a business model that is similar to that of the automobile industry – consumers pay a monthly leasing fee and weekly energy fees for gasoline.
With this demand-based rate structure, energy consumers will want to know ahead of time the exact cost so that they can budget for their monthly bill. This is where LSPs come into play.
What are Load Sequencing Panels?
Load sequencing panels are devices that will replace traditional circuit breaker panels in homes, apartments, condos, and other residences. An LSP is a combination of a circuit breaker panel and a switching panel, where the flow of power is monitored by a microprocessor. Each on/off switch will be connected in series with a circuit breaker; the LSP’s microprocessor turns each switch on or off based on customer preferences, energy costs, and system conditions.
LSPs will be programmable via app, and will have two modes of operation: monitoring and mitigation. In this post, we’ll explore the monitoring mode. In a later post, we’ll look at the mitigation function. It’s important to note that LSPs are still in the design phase at Prescient. If you’d like to learn more about them, contact us.
The most notable difference between smart appliances and LSPs is that LSPs will update consumers with the cost of electric energy in real time. When prices are high, this feature allows residents to decide if they are willing to pay the higher price, or if they would prefer to power off designated circuits until the cost comes down.
LSPs can also be used to reduce residential power consumption when residents are not home or overnight. Users can manually turn circuits off using the app, or program the app to turn specific circuits off during designated hours of the day. This feature can work in contingency with smart appliances, so that energy use can be reduced from both specific circuits and devices. By activating power-saving features, residential customers are also reducing their greenhouse gas emissions.
When in monitoring mode, load sequencing panels will monitor each individual residence’s energy use in KW and KWH. LSPs will communicate with the app, allowing residents to track their usage and bill from their smart phones.
On the app, residents can select maximum KW, KWH, and monthly bill values that they are willing to pay. LSPs will ensure that residents can stay below their set price point. To do this, microprocessors in their LSP will monitor demand and consumption within range of the monthly price point. Host utilities will notify residents of the set price of KW once per year, as well as the cost of energy in KWH every fifteen minutes. Residential consumers will be able to monitor these pricing changes via the app, and can adjust their monthly maximum price point as needed.
The app will alert consumers as they are nearing their monthly maximum price point, their maximum KW threshold, and their maximum consumption price point. It will also display monthly bills and yearly bills before each transaction is finalized. Through monitoring of power consumption, residents should be able to track and curb their usage before the maximum price point is reached. This will help residents form power-saving habits while paying a consistent electricity bill.
For example, if the maximum monthly electric bill is set to less than $100, an LSP can alert residents of increases in their monthly bill before they receive their bill. This example accounts for a monthly energy bill consisting of a $50 infrastructure fee, and a $50 consumption fee. In this case, if the household’s energy usage increases by 1 KW, their monthly bill will increase by $5. Similarly, if the cost of energy is above $0.05 per KWH, an LSP can alert residents that their monthly bill will increase by $1 if they consume 10 KWH between 1:00 PM and 5:00 PM, peak usage times.
Monitoring Mode Categories
Residents will use the app to categorize each circuit in their residence as essential, preferred, or interruptible. LSPs will be programmed to always provide power to circuits categorized as essential, regardless of the cost, to continue powering essential devices such as refrigerators.
LSPs can either maintain or stop the power flow to preferred circuits when costs exceed the consumer’s selected price point, set in the app. LSP will stop power flow to interruptible devices before the selected price point is reached. Table 1 summarizes LSP categories and power flow strategies.
Once consumers have been alerted that they are nearing their price point, they can use the app to either enable continued power to interruptible and preferred loads, or stop the flow of power to those loads. In short, consumers can make a choice that washing clothes at this time is a higher priority than reducing their electric bill, or vice versa.
Residents can select nuanced settings in the preferred and interruptible categories. For example, a preferred circuit may power a dish washer, and could be programmed to stop power to the circuit once the wash cycle is complete. Circuits that power indoor lights could be programmed to activate only after sunset and before a preset bedtime.
In-home climate control is another place where nuanced settings are necessary. The climate control panel could be categorized as either preferred or interruptible, with settings in place to prevent the home from reaching too high or too low of a temperature. Residents could program their LSP to override the maximum price point and send power to their heater if the indoor temperature is below 55 degrees Fahrenheit, or their preferred temperature.
Residents would then pay the market price for power, which may exceed their usual maximum price point. However, the home temperature would be maintained within safe living conditions, which would be vital during a winter storm or heat wave.
Benefits to Consumers and Utilities
Once LSP use becomes commonplace, consumers will build power-saving habits and reduce electricity use. This will lead to reduced greenhouse gas emissions and lower electricity bills. LSPs will reduce maximum KW demand and minimize residential consumption when market prices are very high. This will reduce residents’ monthly electric bills and prevent future sky-high bills like those seen in Texas this past February. By installing LSP, consumers will have the ability to reduce their demand minute-to-minute, as well as their monthly consumption (KWH).
Host utilities could use LSPs to open the circuit to all preferred and interruptible loads if the resident fails to pay their energy bill. Additionally, by updating billing practices, electric utilities will have a sustainable revenue stream. They will be compensated for the infrastructure they build to serve customer load and for the energy they provide.
In my next post about LSPs, I will take a closer look at their benefits to electric utilities, especially in event mitigation and recovery during extreme weather events like the winter storm in Texas last February, or the California heat wave that led to days of outages last summer.
Load sequencing panels will be a game changer for both electric utility companies and electric energy consumers. If you’d like to learn more about LSPs, contact us. We’d love to discuss the opportunities and advantages at greater lengths with interested parties.