More electricity companies are embracing newer technologies such as smart grids to minimize strains to the grid during extreme weather and to restore power quickly in the event of a blackout or a severe storm occurs.
Many utilities have adopted smart meter technology and have installed smart meter grids for its residential customers to help mitigate outages and help consumers spend less money on electricity.
In Virginia, Maryland and Delaware, the Old Dominion Electric Cooperative (ODEC), which provides power to 11 not-for-profit distribution cooperatives, helped its utility customers slash rates by using predictive analytics technology to forecast energy demand. The savings resulted in ODEC lowering rates by four times for its member customers. Better forecasting for the demand of power allows the cooperative to keep costs low, said David Hamilton, manager of load forecasting.
"Each cooperative has unique characteristics, its own weather and economic drivers that affect growth," he said.
Since ODEC owns power plant assets and also purchases power, the cooperative buys contracts months in advance so that if it bets wrong about the weather or energy needs, it is not at the mercy of the spot market.
"It's the driving force behind our costs for 550,000 meters to 1.2 million customers," Hamilton said. "If I don't buy enough, I have to pay whatever the market price is at the time I need to buy. If you have excess, you have to sell it for whatever price you can get."
Hamilton and other employees at ODEC monitor weather data constantly to forecast temperatures in the future and to determine how much power customers will use. While ODEC hedges 90% of its needs and buys contracts for power in six month increments two to three years in advance, they still buy power on the open market. Since ODEC only produces enough power for 47% to 49% of its needs, the cooperative also buys power from PJM, the transmission consortium that operates the largest power grid in the U.S.