Industrial model is stunningly ineffective in the commercial and residential sectors

From an article by William Pentland in Forbes:

Sheboygan Falls, a modestly-sized city of about 7,600 residents in northeast Wisconsin, is not commonly considered to be a hot-spot for clean-technology start-ups or a haven for green-minded consumers.

And yet Sheboygan Falls boasts the single largest ‘operational’ smart-grid program operated by an electric utility in the United States, according to the results of the Federal Energy Regulatory Commission’s (FERC) “2010 Demand Response and Advanced Metering Survey.”

The survey, which FERC conducts biannually, gathers data on demand-response programs and advanced metering “from 3,454 entities in all 50 states and representing all aspects of the electricity delivery industry.”

According to the most recent iteration of the survey, the municipally-owned utility in Sheboygan Falls reported potential peak power demand reductions of 2,700 megawatts (MW), more than three times the amount of potential peak demand – 874 MWs – reduced by the second largest program, which is operated by Chicago, IL-based Commonwealth Edison Company (ComEd).

FERC defines “demand response” as:

Changes in electric use by demand-side resources from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.

Here is the problem. Sheboygan Falls reduced peak power demand by curtailing electric service provided to a single customer – a large, industrial wood-flour grinder. By contrast, ComEd manages a demand-response program for more than 650,000 customers in the residential sector, which is among the largest programs in the country.