Beating the System

Building owners and electrical contra should be paying careful attention to creative solutions to reduce the high costs of electricity consumed by large buildings and building campuses. Solutions are out there and can be found with a little digging. One strategy is to reduce peak demand.

Uneven demand for power is a major problem for utilities. They can’t allow the luxury of providing enough power for the average usage. All of their equipment and systems must be capable of supplying the total load on the system at any given moment. So, for example, suppose a building typically uses 100 kilowatts (kW), but on a hot summer day, the heating, ventilating and air conditioning (HVAC) load drives the usage to 500 kW for three hours in the afternoon. The power averaged over 24 hours would be (500 × 3 + 100 × 21) ÷ 24 =150 kW. But the utility wouldn’t be able to take advantage of the lower average. Its system has to have the capacity to deliver 500 kW. Since the utility company has to be able to supply this kind of variable power at any time of day or night, it has to maintain a very large infrastructure, which is on standby much of the time.

In order to pay for this, utilities bill their customers for both average consumption and peak usage. Since the ratio of peak-to-average demand for residential usage is fairly predictable, the electrical rates for homes contain factors combining charges for both in a single rate. However, the pattern for commercial, institutional and industrial users is widely variable and not easily predictable. To deal with this, utilities charge these customers two different rates, one for average consumption and a separate amount based on the highest single load over a 15-minute period. This strategy places the cost of the extra equipment required to meet the peak requirements on those that create the need. This is where the cost-saving strategies for building managers comes in, a potential source of business for contractors.

If building managers can come up with strategies to reduce the difference between peak and average loads, they can save a significant amount of electricity costs. Some utilities are setting up programs in which they contract with users to cut back consumption by a specified percentage when the utility sends out a signal. In exchange for agreeing to this, the user is given a discounted rate. The utilities do this to stabilize the grid by reducing the effects of peak summer loading—the kinds of peaks that have caused recent blackouts and transformer explosions.

Peak demand can be reduced by instituting procedures to reduce heating, cooling and lighting loads, which are the ones that generally cause uneven demand throughout the day (aside from industrial plants where power is consumed as part of the production process). With automated systems to control HVAC and lighting, building managers can both automatically respond to a signal from the utility and also program their loads to be more evenly balanced—a double money-saving win. Currently, some California utilities are experimenting with demand response in cooperation with the California Energy Commission and the U.S. Department of Energy. The Con Edison Co. in New York also is running a demand-reduction program.


Lawrence Berkeley National Laboratory conducted a study of automatic demand response strategies in California and issued a report, “Introduction to Commercial Building Control Strategies and Techniques for Demand Response.” In assessing the possibilities for reducing the lighting-demand load, the authors of the study concluded that dimmable controls are the most effective because they can reduce light gradually so the occupants of the space will not notice it as much as with a step cutback. They quote a study by the Lighting Research Center that found a 30 percent light level reduction over 10 seconds would not be noticed. A further advantage of reducing light levels is that in summer, lighting adds to the heat loading on the air conditioning system. It might also be economical to take advantage of the heating effects of lighting in winter. If lighting is controlled by means of a closed-loop system in which a signal proportional to actual light levels is fed back to a controller, its control can be modified with experience over time to take into account the actual environment in which the system is installed.


The methods for reducing the HVAC load by using closed-loop feedback systems are similar to lighting, but the strategies are more complicated. One important example is rebound. After having been cut back, lighting systems can be immediately returned to their normal levels. According to the authors of the study, however, HVAC systems tend to use extra energy to return systems to their normal settings.

This is intended as an introduction to a kind of project that can achieve savings for end-users, electric utilities, the general public and the environment. This type of project can not only provide installation work for electrical contractors, but also give them an incentive to expand their scope of work by using their expertise to team with systems integrators and information technology professionals.

BROWN is an electrical engineer, technical writer and editor. He serves as managing editor for SECURITY + LIFE SAFETY SYSTEMS magazine. For many years, he designed high-power electronics systems for industry, research laboratories and government. Reach him at

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