Peak Alert Community Benefits

As energy use and energy prices continue to rise, our voluntary Peak Alert program has become more important than ever to temper energy use on high-demand days. These alerts are only issued when absolutely necessary (typically around five times per year), but the number of alerts can vary as much as Minnesota weather. Extreme weather often triggers an alert, and the majority of the time extreme heat, rather than cold, is the culprit.

By issuing a Peak Alert, Austin Public Utilities asks its customers to conserve energy during the time of day when use is at its highest, typically late-morning through dusk on hot days. During a cold-weather Peak Alert, conservation is necessary first thing in the morning and again in the evening when the need for heat is at its peak.

To date, energy shortages and blackouts or brownouts have not been a great concern in our region of the United States. However, if we have an extended period of peak use, it’s possible we could face such a situation without conservation efforts. Other parts of the U.S. have faced shortages in the past.

Peak Alerts benefit the entire community
As a non-profit and community-owned utility, the rates we charge residents and businesses are based entirely on our cost of doing business. As a result, when our costs for energy go up, so must our customers’. We buy energy from a wholesale supplier at a specified rate. However, since electricity can’t be stored, it must be produced on demand. During peak demand periods additional generators are required, which are more costly to operate, driving up energy costs.
  • By saving a single megawatt of power during a peak period, we reduce our costs by $85,000, which means we could potentially save hundreds of thousands of dollars each year, and keep our rates in line.
  • 11 percent of our total purchased power cost is related to the peak we set each year. We can keep these costs lower by controlling the peak and thereby save $$$$.
  • In the past, we have worked primarily with businesses and other large-volume energy users, and we’ve had great support, helping us keep our peak down during the day. Now, however, our peak use is shifting to later in the evening as people get home from work, demonstrating how this program needs to be a community-wide effort, not just focused on one segment of the community.
Conserving to protect the environment
Reducing energy use through Peak Alert periods conserves energy, and every kilowatt hour conserved is one that does not have to be produced from a fossil fuel plant. This is good for the environment since it reduces the amount of fuel that needs to be used to make electricity, and it lowers carbon emissions produced by coal-fired power plants. In addition, increased demand is pressuring power suppliers to add infrastructure to satisfy demand. Keeping our peak use periods as low as possible will help defer construction of new plants.
Rate outlook
When our energy use rises above our wholesale supplier’s ability to produce enough for our needs, we must purchase power on the open market instead. Recent reports say the Federal Energy Regulatory Commission expects double-digit increases in wholesale electricity prices this summer when compared with last summer. To avoid these inflated rates, it’s important that we keep our peak load down to avoid purchasing power on the open market.
Research results
Peak Alerts have been necessary in recent years, and we have issued alerts several times each year. Still, awareness of the program is lower than we’d like, which makes it difficult to avoid costly spikes in demand.
Austin Public Utilities recently conducted research on our Peak Alert program. We surveyed 200 residents in our community and gained some insightful knowledge that will help in future communications on a number of vital issues. Some statistics from the research include:
  • Roughly two-thirds of residents were familiar with Peak Alerts after we asked them if they’d heard of the program (aided awareness). Comparatively few residents, however, could name the program without prompting (unaided awareness). Only 4 percent could cite Peak Alert without prompting in Owatonna compared with 24 percent in Austin.
  • Of those who were familiar with Peak Alert, more than 90 percent believed it was a worthwhile program.
  • Roughly 60 percent of those familiar with Peak Alert said they reduced air conditioning use when a Peak Alert was issued, and on average, each resident said they altered their use of two activities. We see room for improvement in both these figures.
  • Approximately 10 percent of those surveyed said they did not change their actions when a Peak Alert period was announced.
Be a small part of something big
Peak Alerts are not often called, but when they are we ask that every resident and business take them seriously and do their part. Every small action counts, and the cumulative effect becomes substantial. Though it’s a voluntary program, Peak Alert periods are necessary to keep our energy costs in line.
When a Peak Alert is issued, we announce it that morning on local radio stations. In addition, we’ve started a program to email information to residents and businesses. To subscribe to this email service, please send an email to peakalert@austinutilities.com and type “Add me to your list” in the subject line.