SACRAMENTO — The California Power Authority announced a program Tuesday to pay large industrial power users to cut consumption. Those customers will be paid less than the cost for actual electricity.
The program has several advantages over building new power plants, said Power Authority Chief Executive Laura Doll, and companies won't have to shut down completely to meet their obligation.
The program will rely on satellite technology and real-time electric meters to dim air conditioners or lights automatically when the state's power buyers call on the companies.
"This is cheaper, and it's quicker," said S. David Freeman, chairman of the California Power Authority.
The Power Authority estimates the program will cost $7 million this year, and will be able to call on as much as 250 megawatts of energy. One megawatt is approximately enough energy to operate 750 homes.
APX Inc., an energy scheduling company, will be paid $750,000 this year to administer the program. As more power users are enrolled, APX's fee will rise to about $2 million a year.
The California program is similar to ones offered in other states, except that California power traders won't have to wait until reserves are low to call on the conservation measures, said John Yurkanin, APX's chief executive.
Companies that sign up for the program will get a monthly reserve payment, Doll said, and next year, they also will get paid for the energy they save.