Background

This Standard Offer Program was developed to comply with state energy efficiency goals. The Texas Legislature passed Senate Bill 7 (SB 7) in 1999, which restructured the state's electric utility industry. SB 7 was amended in 2007 by HB 3693. State law now calls for each investor-owned transmission and distribution utility to meet a goal of 15% reduction in its growth in system demand by December 31, 2008, and a goal of 20% by December 31, 2009, and annually thereafter through savings achieved by energy efficiency programs. Load Management is specifically listed as an approved energy efficiency program to help meet this goal.

Program Objectives

The main goal of the Load Management SOP is to reduce summer peak demand in the CNP service territory in a cost-effective manner and to reach the demand savings goals established by the legislature and Public Utility Commission of Texas (PUCT) regulations. In addition, there are secondary program goals that are reflected in the SOP rules and procedures:

• Encourage private sector delivery of energy demand savings during peak demand time for the Electric Reliability Council of Texas (ERCOT), the electric "grid" serving most of the State, and for the transmission and distribution system of CNP.
  
  
• Create a simple and streamlined program process to stimulate strong program participation from energy efficiency service providers.
  
  
• Minimize the burden of measurement and verification requirements for the SOP by implementation of a simple Verification Process by CNP.

Program Summary

CenterPoint Energy Houston Electric, LLC (CNP) is the transmission and distribution utility (TDU) authorized to serve the Greater Houston Area. It is one of the largest TDU's in the state of Texas, serving more than 1.86 million industrial, commercial, and residential metered customers.

The Public Utility Commission of Texas (PUCT) has authorized TDU's to implement and manage a 10-year demand control program known as the Load Management Standard Offer Program (PUCT Substantive Rule 25.181), and to pay its participating eligible customers for agreeing to curtail pre-determined electrical loads when needed to help preserve electric grid integrity.

Sponsoring participants ("Project Sponsors") may be any distribution level and/or any governmental, educational, or not-for-profit customer of CenterPoint Energy. Project Sponsors undergo a five-step process in order to receive incentive payments. Each of these is covered in detail in the program manual:

• Step One (Appendix A): Application
• Step Two (Appendix B): Contracting
• Step Three: Performance Period
• Step Four: Monitoring and Verification
• Step Five: Incentive Payments

Project Sponsors must commit Curtailable Load to the program for one summer period. Longer-term participation may be possible; however, there are no penalties for Project Sponsors who opt out of the program earlier beyond loss of participation.

Curtailments may occur during the summer peak demand period of each year, defined for this Program as weekdays, May 1 through September 30, of each program year, between the hours of 1:00 and 7:00 p.m.

Participants are required to curtail pre-determined and contracted electric loads for a maximum annually of 17 hours, determined as follows:

• one scheduled 1-hour test curtailment and
  
  
• the possibility of four unscheduled curtailments each year, not to exceed four hours duration each.
  
  
• The unscheduled curtailments may be called with one hour's notice, and may have a duration of a minimum of one hour to a maximum of four hours.
  
  
• Incentive payments differ for scheduled and unscheduled curtailments but will total up to $40 per kW curtailed for each year of its participation in the program. This means that a customer meeting program requirements and providing 1 megawatt (1,000 kilowatts) of curtailable power, will earn up to $40,000 per year, depending on actual delivery during curtailment periods (see Step Four).
  
  
• The unscheduled curtailments may be called with one hour's notice, and may have a duration of a minimum of one hour to a maximum of four hours.
  
  
• Incentive payments differ for scheduled and unscheduled curtailments but will total $40 per kW curtailed for each year in the program. This means that a customer contracted to provide 1 megawatt (1,000 kilowatts) of curtailable power, will earn up to $40,000 per year, depending on actual delivery during curtailment periods (see Step Four).