E
very deregulated and regulated electric market is seeing prices rise this year, and this trend will continue into the foreseeable future. Here are the causes: retiring coal plants, increased building electrification, electric vehicle (EV) charging, increased intermittent renewables production, and rising fuel costs due to government policies. The extra demand on the grid is also causing electric issues for reliability and quality of service. The net result is higher electric bills for your condo and building.
PJM, the Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity in all or some of a group of states including Illinois, recently held a Capacity Auction to try to attract more electric generation assets to be built in the 13-state area. The auction results will be Capacity charges from PJM going up 9-fold in June 2025, equating to an increase from $.007 to $.022 per kilowatt (kWh), depending on your Capacity Tags.
Typically, a community association’s property management company or board members work with an energy broker or consultant to create a Request for Proposal (RFP) to get multiple suppliers to bid competitively on the community association’s electric and gas Energy Load Profile. Every broker has access to the same energy suppliers for pricing, so there is no benefit to using multiple energy brokers. The energy load profile of your building ultimately determines the pricing that you get. In fact, two buildings could use the same amount of annual kWh but have their pricing be different by up to 50%.
Electric pricing for a building is based on its Capacity Tag, kWh used during peak hours, and kWh used during off- peak hours. Peak hours are typically from 8:00 AM to 9:00 PM, when most people use energy at work and also air conditioning. Off-peak hours are the rest of the hours and are always lower in cost than kWh used during peak hours. For an example, ComEd LMP day ahead electric pricing (this does not include many other components) on July 22 at 3:00 AM the off-peak price per kWh was $.01509; and at 5:00 PM, the peak price was $.06307 per kWh. July 23, 2024, must have been hotter because the off-peak cost was $.01445, and at 5:00 PM the peak electric cost was $.08901. As you can see, there is a significant cost difference between off- peak versus on-peak. There is magic in changing the energy load profile for your building to save money.
The Capacity Tags are always set during peak hours and typically between 3:00 and 6:00 PM Eastern time zone during the summer. Your energy broker submits your energy load profile to suppliers, who calculate pricing based on your load and future commodity market pricing based on your usage throughout the day and year.
However, the energy magician starts with your current Energy Load Profile and engineers a solution to magically move peak hour usage to off-peak hours, manipulating energy usage to obtain better electric pricing. The magician
10 | COMMON INTEREST®
supplies all of the magic props or equipment to change the building’s load profile through the Energy-as-a- Service model. This means the association needs no capital and takes on no debt to participate.
The primary solution for Electric Load Shifting is to use thermal energy storage for your chiller and chilled water loop. By engineering thermal storage, the chillers can operate at maximum efficiency during the off-peak hours to fill the thermal storage battery with cooling BTUs, or in other words so many ton hours of cooling, and then the chillers don’t run during the peak hours. This effectively reduces the electricity cost, peak kWh demand, and your Capacity Tags and charges.
A thermal energy storage system (TESS) is either stored in ice or a phase change material that is not water. Both store tremendous thermal energy based on the phase change from liquid to solid when the building uses cooling. Ice storage does require a special low-temperature chiller to make the ice, or in some cases, your existing chiller can be converted to make ice. The low-temperature chiller is needed since the existing chiller typically produces chilled water at 42 degrees but now has to make ice at 24-28 degrees. The phase change material (PCM) is designed to store thermal energy at the temperature your current chiller operates at (42-44 degrees Fahrenheit) so an additional chiller is not needed, but the PCM material costs a little more compared to water for ice. A software program manages the thermal energy storage and releases it to the chilled water loop based on the cooling load and time for peak hours.
Is it magic? Sleight of hand? Prestidigitation? You’ve had a peek behind the curtain, and the illusory
feat is real: Electricity costs can be decreased with some behind-the-curtain work leading to a certain outcome. A little magic can reduce your carbon footprint and your budget for the next 25 years.
Reduced Energy Costs!
• Winter 2024 • A Publication of CAI-Illinois Chapter
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