Eight years after Mike Tarantino pulled out the stops trying to reduce electricity use across the Poway Unified School District, he still lives with trepidation that a heat wave will spike air conditioning use, or a cold snap will prompt an outbreak of furtive space heaters.
Then electrical use and costs will surge, and the effect will be lasting, making up, for example, more than $38,000 of a total $70,000 one-month electric bill for Del Norte High School last year.
“It is a nasty tier,” Tarantino said.
The higher costs are known as “demand” charges, and Tarantino has done much to avoid them. The director of facilities, maintenance and operations at Poway Unified placed thermometers in all classrooms at the district’s 39 schools, and centralized controls where one person could monitor them. He replaced old air conditioning units with new efficient ones, installed LED lighting and window shades, and used heat-absorbing asphalt sparingly and away from classrooms.
He has outfitted five schools with solar panels and recently constructed an elementary school that actually exceeds California’s restrictive energy efficiency guidelines by 30 percent, a feat. Tarantino was even named San Diego Gas & Electric energy champion for K-12 schools in 2013, a point of pride. But his bills can still bring a shock, so now he’s taking the next step — large scale battery power.
“I mean battery backup, battery storage. How long ago would we have said, ‘Are you kidding me?’” he said.
Tarantino is waiting for the state architect’s approval to install large blocks of lithium ion batteries at 10 schools in early 2016. They will come from Green Charge Networks, a Santa Clara firm specializing in commercial energy storage.
The silver-colored columns 8 feet high and 20 feet long will charge up on inexpensive nighttime electricity. Software inside will study each school’s habits, relay warnings to Tarantino when use is climbing, and begin feeding battery power toward the school so the school will take less from San Diego Gas & Electric.
The long-awaited battery age, where electricity can be held and discharged as needed, has begun.
Rachel McCafferty, account manager at Green Charge Networks, said the company has signed more customers in 2015 than in all prior years combined. “It’s trending to be an explosive 2016 as well,” she said.
In July, three Escondido high schools signed a deal with Tesla to install battery power.
The real push for these installations comes from school districts, universities and cities, McCafferty said, and what is driving them to her company is demand charges.
“San Diego has the highest demand charges in the country,” she said. In Northern California many elementary schools are on a lower electrical rate, she said. “But in San Diego, really every school is on a high demand rate tariff.”
Here the charges are set by San Diego Gas & Electric, the utility for the region and a subsidiary of publicly traded Sempra Energy, [NYSE:SRE] and the California Public Utilities Commission. They are unlike the tiered rates familiar to renters and homeowners.
They work like this: The utility pinpoints the single 15-minute period when a school pulls the most electricity, in the example above, 899 kilowatts, and multiplies that by $41.87 (Click here to see more) for each kilowatt. This can make for a rather high number.
The reason these charges exist, utilities say, is to cover the cost of making all the power businesses need available instantly.
“If a large customer has a large amount of demand at a certain time of day, we have to build the infrastructure to meet that,” said Hanan Eisenman, communications manager with SDG&E. “We can’t not meet it.” He cited simultaneous demand from hospitals, malls and military installations.
Green Charge Networks thinks it can save Poway Unified School District some $133,000 its first year and $1.6 million over 10 years. If it doesn’t, Tarantino has lost little. He doesn’t pay for the batteries or their installation or maintenance. All he has to do is find a place for them. The company demonstrates to Tarantino how much money it is saving, then invoices him for part of that. The remainder of the savings stays with him.
He will be elated, he said, if the batteries can shave down those demand spikes that come with hotter days. And the fierce demand charges that come with them.
“I ask, what do I have control over that I might be able to save a teacher’s job or my job?”
Sky-high school electric bills have been in the spotlight this year. More than three dozen San Diego area districts combined forces to press the Public Utilities Commission to deny a large SDG&E rate hike last spring.
But some experts said schools are not being singled out. They are commercial customers just like any other large business.
“I don’t think any nonresidential customers are really getting a good deal,” said Mike Rochman with the School Project for Utility Rate Reduction, a joint powers authority that negotiates for electricity and natural gas on behalf of California public schools and local governments.
If schools pay less, he said, then someone else will pay more, as long as SDG&E is the power monopoly in the region, with rates and profits approved by the state.
People like Rochman who believe there should be customer choice for electricity are pursuing that option in San Diego. Such choice already exists in several places in California and elsewhere in the country.
SDG&E is one of three large investor-owned utilities in the state. Shares of Sempra Energy, its parent company, have risen from $53 in 2011 to $113 earlier this year. They currently trade near $100. In early November, Sempra Chairwoman and CEO Debra Reed said the company was on track to exceed its 2015 financial objectives.
San Diego Gas & Electric says it now gets 33 percent of its power from renewable energy sources, five years ahead of a state mandate. “That makes us one of the cleanest utilities in the nation,” Eisenman said.
How we figured total demand charge
The figure $41.87 per kilowatt in demand charges was obtained by summing three line item demand charges on a single Poway Unified school bill. inewsource examined bills for several schools. The charges below were the same on each.
Summer On-Peak Demand: $9.80 / kW
Summer Non-Coincident Demand: $20.77 / kW
Summer Generation Demand: $11.30 / kW
One month electric bill for Del Norte High School.
(Bill is for just one of the school’s two meters.)
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