What is peak demand, and why is reducing it important?

Electricity is produced for immediate use; it cannot be stored economically. Because of this, power plants must meet electricity requirements at all times. Peak demand refers to those periods when electric consumers collectively use the most electricity. Generally, prices are higher during demand peaks. As a result of electric competition in Pennsylvania, the price you pay for electricity is partially based on how much power is used by all consumers during the peaks.

When are the peaks?

Throughout the year, peak demand for electricity can occur weekdays any time between 7 a.m. and 10 p.m. However, summertime peaks typically occur on those hot, humid weekdays when air conditioners are working the hardest to keep us comfortable.

How does demand response work?

First, an electric co-op consumer volunteers to have a demand response unit (DRU) installed on an electric water heater or other heating/cooling equipment. Meanwhile, computers monitor electricity demand and weather data. When demand reaches an extremely high level, an operator sends a signal over electric lines which reaches various demand response units. The DRUs then temporarily switch off power to the equipment to which they are connected. An amber light on each DRU indicates when the unit has cut power to the connected equipment.

Who can participate in the demand response program?

Cooperative members with heat pump or storage tank water heaters may be eligible. (Heat pump water heaters must be kept in hybrid mode.) Call 800-432-0680 or contact our member services department to see if you qualify.

What does Valley offer to participants?

Valley is currently giving a $100 bill credit to new program participants who agree to have a demand response unit placed on their water heater or heating/cooling equipment.

Also, a rebate of $2 per gallon (for tanks from 40 to 79 gallons) or $3 per gallon (for tanks that hold 80 gallons or more) is available to members who purchase a new electric water heater. If the new water heater is a Rheem^® Marathon^® water heater, the rebate increases to $3 per gallon (for tanks from 40 to 79 gallons) or $4 per gallon (for tanks that hold 80 gallons or more). The tank's energy factor must be 0.9 or higher, and the member must agree to participate in demand response.

Rheem^® and Marathon^® are registered trademarks of Rheem Manufacturing Company.

How much will the system cost me?

Nothing. If you volunteer, the cooperative will pay the cost of the demand response unit and its installation. Power cost savings resulting from the program offset any expense incurred by the co-op.

Will I have hot water when my water heater is switched off?

Water heaters have traditionally been the focus of demand response because they provide efficient heat storage. Studies show an electric water heater can remain without power for several hours and not inconvenience consumers.

What precautions have been taken to ensure that I will have hot water?

Several precautions are built into the demand response system to ensure that you will not be inconvenienced. First, equipment is grouped according to storage capacity and household size. No group is turned off longer than the storage capacity and needs of the family allow. Second, the system has been designed so that, if any section fails, the demand response unit on your equipment should keep electricity flowing.

What if I am not satisfied with the demand response unit?

Ideally, you shouldn't even notice your DRU. It quietly does its job as you go about your daily routine. A DRU may not be for everyone, but everyone shares the benefit of more stable energy costs and a clean environment.

First, we will work to adjust the settings and correct the problem. If you are still dissatisfied, you may discontinue your participation. We will promptly send a technician to your property to retrieve the equipment. Any monetary incentive received for participation may be charged to your bill on a prorated basis according to your years of participation. (A three-year minimum is required for you to retain the full amount of the incentive.)

Clean power law recognizes co-op demand response program efforts

Because Pennsylvania's electric co-ops have promoted the benefits of energy conservation and clean power for years, they became natural partners in helping to shape the state's renewable portfolio standards (RPS) law. Under RPS, private power companies and competitive electric generation suppliers across the state must include increasing amounts of green energy in their generation mix. Electric cooperatives, on the other hand, meet current RPS requirements through demand response.

As not-for-profit, consumer-owned and governed utilities, electric cooperatives base decisions on economic, operational, and community impact, with the goal of providing a reliable supply of power at the lowest possible cost.

Through demand response, electric co-ops shift the electric use of residential water heaters, electric thermal storage units, dual-fuel home heating systems, and other special equipment to off-peak hours. This improves system efficiency, cuts costly demand charges that co-ops must pay for purchased power, and reduces the need for generating capacity.