Cass County Electric Cooperative (CCEC), an electric cooperative providing power to Fargo, North Dakota, U.S., and the surrounding region, has been building its demand management program for more than 30 years. With nearly one-third of all accounts involved in the program, CCEC can clip 50 MW, or about one-third of its summer peak. The winter capability of CCEC's program is even stronger, with the ability to drop 104 MW, or nearly half of its winter peak.

CCEC has worked hard with its members to implement a broad array of controllable loads. These include residential, agricultural, commercial and industrial demand management applications ranging from water heaters, dual heating systems, irrigation and grain site controls, cycled air conditioning and backup generators. In 2010, participating members saved nearly US$12 million in power costs in exchange for their ability to reduce system peaks. These programs have eliminated or greatly reduced the need for expensive gas peaking plants, high-price market power during peak conditions or plant outages, and transmission line loading constraints.

In October 2005, a catastrophic blizzard damaged and interrupted much of the eastern North Dakota transmission system. CCEC's load management system was integral to providing immediate relief after a state of emergency was declared by North Dakota's governor and MISO to reduce system loads. More than 50% of CCEC's system load was dropped, which helped prevent rolling blackouts if not a total grid collapse.

About 150 standby diesel and natural gas generators make up almost 25% of CCEC's load management program capability, offering nearly instant load relief during critical economic or constrained grid conditions. These generators are located at commercial businesses and industrial facilities, ranging from gas stations to hospitals to shopping centers. Last year, generators were used for 27 hours during critical winter and summer peaks, reducing system load by about 70 MW. Member savings in exchange for this interruptible capability is usually 30% or more versus firm rates. CCEC further enhanced the generator component of its load management program by developing an innovative and award-winning rate structure that reduced generator run time by 80%. This was achieved by creating dynamic intermediate pricing available for shoulder peaks (versus critical and emergency peaks). The program continues to be a great success.

The Environmental Protection Agency (EPA) recently revised the National Emission Standards for Hazardous Air Pollutants (NESHAP) rules for compression ignition and spark ignition stationary Reciprocating Internal Combustion Engines (RICE). The revised RICE NESHAP rules are discriminatory to almost every diesel engine used primarily for emergency standby power and occasionally for peak shaving to manage electric load, such as in CCEC's program.

These rules will prohibit the use of these emergency units for peak-shaving programs beginning in May 2013 unless they are modified with expensive emissions-reduction technology, continuous emissions monitoring and complex reports to the EPA. The rules do provide up to 100 hours of non-emergency operation per year for any purpose except peak shaving or load management. The additional cost associated with these requirements will make it economically unaffordable to use these engines for peak-shaving programs.

These limited-use engines would easily fall within the 100 hours allowed in the rule for non-emergency operation, yet are specifically prohibited from being used for any load management or peak shaving unless modified. The National Rural Electric Cooperative Association requested that EPA reconsider the exclusion of peak shaving under the 100-hour exemption. The EPA is expected to issue its final response to the request for reconsideration by the first part of 2012.

The EPA has been asked to remove the prohibition on these engines for peak-shaving and demand-reduction purposes. The result would be no more run-time than is already provided for in the rule with no measurable public health risk or environmental harm. On Dec. 9, 2011, North Dakota Congressman Rick Berg introduced H.R. 3616, the Generator Regulatory Relief Act. This bill would exempt all existing RICE regulated under NESHAP that are used for emergency and peak shaving.

Generators located at commercial and industrial facilities throughout the country can increase the integrity of our nation's grid through load management and save millions in power costs. The revised EPA rules are prohibitively expensive and impractical, and could eradicate the benefit of electric load management. These rules, if left as proposed, will further tax businesses already struggling in this economy. The proposed exclusion of peak shaving in the EPA rule is unaffordable and provides no health benefits of any substance for our nation.


Jeremy Mahowald (jmahowald@kwh.com) is the manager of energy management and conservation for Cass County Electric Cooperative in Fargo, North Dakota, U.S.