Good Energy wants you to know the truth about aggregation:
Aggregation is a means of combining the loads of more than one electricity
account with the goal of shopping the electricity supply market to get a better
price for power. The idea is that all members of an aggregation pool could
benefit from the lower prices made possible by a large economy of scale.
When appropriate, Good Energy uses this technique to help customers save money
on electricity supply costs in deregulated markets. However, as illustrated below,
if the process is not performed properly, electricity demand aggregation does
not always help all customers save money.
Here's why: Not all consumers of power are equal in the eyes of utility companies.
From the utility's viewpoint, the best customer uses a constant amount of power
all day long, throughout the year. This means that the perfect customer's peak
demand for electricity is EQUAL to the customer's average demand for electricity.
This customer would have what we call a 100% "load factor".
Such customers are rare, because in the real world, consumers of power will turn
off their lights and equipment when appropriate, leading to varying consumption
of power throughout the day.
An office building might have a load factor around 49%, because the vast
majority of power to operate such a facility would be consumed during the day,
while the office tenants are in the building.
A hotel might have a load factor around 84%, (which is much better from a
power-shopping standpoint), because occupants of the facility would be using
power from the early morning, throughout the day and into the night.
A theater might have a load factor similar to that of an office building,
(48%), but most of the power consumed by a theater would be immediately before,
during and immediately after the performance, (in the evening), which means that
the peak demand for power would not coincide with that of the office building.
Non-coincident peak demand for power is sometimes the key to successful aggregation.
For example, if we add up the usage for the office building and the theater, we
get a combined load factor of 58%, which is a good improvement over the customers'
individual load factors. Both of these customers will get a better deal for power
supply if they shop the power supply market as one.
However, if the hotel and the theater were to shop for power together, the theater
would get a better deal, but the hotel might be shooting itself in the foot. The
combined load factor for the hotel and the theater would be 69%, which is respectable,
but a far cry from the hotel's existing load factor of 84%
Although these examples are simplistic, they serve to illustrate the point that
aggregation of electricity demand must be performed correctly to protect the
interests of all parties. Good Energy fights for consumers of power to make sure
they are getting the best deal possible in any power market, and we will use
aggregation as a means to get our customers the best price for power when it
makes economic sense to do so. Please contact a Good Energy professional today
at (866) 955-2677 to find out what we can do to help your business
save money on electricity costs.