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$150M in rebates for peak load reduction efforts

Newsom Signs an Emergency Proclamation to Help Stabilize Electrical Supply

California’s electrical grid is being pushed to the limit. Last year’s extreme heat events overwhelmed the supply capacity of the electrical grid, leading to brownouts. The principal driver was air conditioning loads.

Regulators are predicting a 3.5GW shortfall of electricity again this summer due to extreme heat events. The impacts of climate change are real, and the state needs to find a means to meet the demands.

Governor Newsom has developed a plan to help prevent capacity overruns during these extreme heat events. His approach includes several measures such as providing battery storage, streamlining the permit process, installing backup batteries, and encouraging large electricity consumers to utilize their backup power plants during grid emergencies.

Perhaps the most significant effort, from the energy efficiency standpoint, is paying for savings during peak use periods. When you consider grid loads, the time savings occur impacts their value. If your efforts provide savings during peak loads on the grid, 4 pm to 9 pm, they are worth more than measures that reduce energy during the middle of the night.

How much are these peak load savings worth? Millions of dollars. That’s great news for home performance, and HVAC contractors as building envelope and high-performance air conditioning systems are very effective at reducing peak loads.

Governor Newsom and the CPUC authorize $150M in rebates for peak load reduction efforts!

That is not a typo. The state has allocated $150 million to be paid out to companies that reduce electrical demand during summer peak load events. The rebates focus on the actual measured savings, regardless of how they are achieved.

This new approach sets the stage for providing rebates for various solutions rather than individual measures. For example, advanced building controls that increase set points during peak loads to reduce air conditioning loads. Variable-capacity air conditioning systems, building envelope improvements, Smart EV chargers, shifting loads to backup storage systems all become viable means of reducing stress on the grid during extreme weather (heat) events.

The advantage of this “by any means” approach is the focus is on the measured savings, not how you achieved them. Paying rebates, based on measured savings, streamlines traditional rebate programs’ complicated and cumbersome approach. With this new FLEXmarket approach, you get paid if you can prove that your efforts save during the peak load period. It’s that simple.

The California Market Access program, also referred to as FLEXmarket, is available to all parties.

Want to learn more and see if your company can benefit? The first step is to learn more about the specific details by reviewing the FLEXmarket website, supported by RECURVE.

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