1.

0 Introduction

1.1 Background of the Study

Energy conservation, reliability and the cost of electricity have been major considerations
for utilities. The rapid growth of the demand in electricity is continuously increasing.
International and local institutions are finding ways to meet this growing demand in
electricity. In order to increase generating capacity, utilities build new power plants to meet
peak demands. However power plants have environmental impacts, such as CO2 emissions
from a fossil fuel plant, and large amount of energy sources are needed in order to operate
these plants. In order to defer the construction of these new plant utilities now provide
services that are cost effective, help reduce customer electric bills and they provide better
customer service. These services are provided by demand side management (DSM). In the
90’s, the Philippines experienced a power crisis which damaged the country’s economic,
political and social life. To address this problem the government created policies to meet
the growing energy demand of the country. These policies have the goal of ensuring a
continuous and economic supply of electricity and promoting and adopting energy
conservation practices. One of the Philippine energy efficiency and clean energy program
is the demand side management. It is aimed at the electric utilities’ designed to influence
their customers to utilize electricity in way that will produce the desired level of electricity
demand or load shapes.

During the 80’s energy efficiency programs evolved in the United States (US). From 1985-
1995 more than 500 utilities in the US implemented DSM programs which results to a huge
reduction in their peak demand, in gigawatts of electricity. These programs reduced air
pollution emissions from power plants approximately by forty percent. Due to its success
in implementing DSM programs, Thailand has been recognized internationally. It became
successful in reducing its peak load from 1993 to 2000 by forty percent of its 1999 capacity.
Vietnam is another example of Asian country that is experiencing unpredictable economic
growth which requires substantial expansion of electric power sector and demand reduction
efforts. With the help of international organizations, Vietnam develops a four large DSM
programs as part of their long term power sector strategy. The goal of this effort is to reduce
its electricity demand during peak periods, reduce environmental degradation and help
customers to efficient use of electricity.

Due to environmental impacts from stationary power sources and uncertainty in the
continuous flow of fossil fuels and its increasing cost, industrialized countries and
developing countries around the globe are making a continuous effort in promoting
efficient use of energy to provide a continuous and sustainable supply of energy. DSM
programs are being considered as part of these energy solutions.

1.2 Statement of the Problem

Economic zones are major consumers of electricity, where most of their loads are
composed of industrial and commercial establishment. The study is focused on the peak
demand reduction of Clark Electric Distribution Corporation (CEDC), which is the sole
distributor of electricity at Clark Freeport Zone.

1.3 Objective of the Study

The study aims to develop a demand side management program that can be implemented
to the target customers of CEDC for the reduction of its peak demand. The specific
objectives of the study are:

 To establish a base case through data gathering that will serve as a reference
for the development of a DSM program and projection of future of energy
needs and services.
 To develop a methodology for the assessment of the effectiveness of a DSM
program.
  To enhance customer service by promoting the efficient use of electricity
and providing them the information from the data gathering that is
substantial for the assessment of their electric consumption.

1.4 Scope and Limitations

The customers of CEDC are classified as residential (R), general service (GS), large
general service (LGS), small industrial service (SIS), and large industrial service (LIS)
customer.

The target customers are the LGS, SIS and LIS. Demand charge is applied to these
customers. These customers have large amount of electricity demand and energy
consumption which make them a good candidate for the reduction of peak demand if they
participate on DSM programs. LGS customers are categorized as commercial loads with a
demand of not less than 30 kilowatt (kW), SIS are industrial customers with a demand of
less than 40 kW and LIS are industrial customers with a demand of 40 kW and above.
These customers are assumed to have flexible loads which can be shifted from peak periods
or reduced during peak period that could result on the reduction of peak demand of CEDC.
The study will not include environmental effects of power sources where CEDC derives
its power.

1.5 Assumptions

The high cost of electricity is influenced by the quantity of peak power utilized by the
consumers in a given period. A corresponding decrease on its amount will reduce energy
cost.
1.6 Significance of the Study.

Demand side management promotes the efficient use of electricity. Reduction of peak
demand is both beneficial to CEDC and its customers. Efficient use of electricity reduces
the demand for electricity and saving electricity means saving money. It keeps the
electricity costs down. In an economic zone the price and continuous supply of electricity
are major considerations for investors.

The reduction of peak demand at CEDC improves its reliability and it eliminates the fear
of power interruption. DSM enhances customer services. It improves the relationship
between the utility and its customers, one can benefit from the other by exchanging
information and related services. Generally, DSM is economically sensible to utilities by
offsetting or delaying significant generation and distribution investments.

1.7 Definition of Terms

Consumer – the end user of electricity.

Customer – see consumer.
Demand – see power.
Demand Side Management – the planning, implementation, and monitoring of utility
activities designed to influence customer use of electricity in ways that will produce desired
changes in a utility's load shape (i.e., changes in the time pattern and magnitude of a utility's
load).
Distribution – the act or process of delivering electric energy from convenient points on
the transmission or bulk power system to consumers. Also a functional classification
relating to that portion of utility plant used for the purpose of delivering electric energy
from convenient points on the transmission system to consumers.
Distribution Utility – any electric cooperative, private corporation, government-owned
utility or existing local government unit which has an exclusive franchise to distribute
electricity to end-user.
Energy -
Energy Audit – a review of the customer's electricity usage often including a list of their
electric energy using equipment with their nameplate rating. An audit usually includes a
visit to the customer's facility.
Equipment – a general term including material, fittings, devices, appliances, fixtures,
apparatus, and the like used as part of, or in connection with, an electrical installation.
Feeder – the distribution lines or conductors extending from the distribution substation to
the customers connection point, or to the distribution transformer serving the customer.
Interruptible Rate – a rate schedule where a discount on the price of electricity is applied
in exchange for a user commitment to reduce demand when requested by the utility.
Load – any electrical device that uses power supplied by the source.
Load Curve – is a graph of the variation in electrical load, in kilowatt, versus time.
Load Profile – see load curve.
Peak Demand – the highest power or demand consumed on a specified period.
Power – the rate at which electric energy is delivered to or by a system, part of a system,
or a piece of equipment. It is expressed in kilowatts (kW).
Power Quality -
Reliability – the guarantee of system performance at all times and under all reasonable
conditions to assure constancy, quality, adequacy and economy of electricity. It is also the
assurance of a continuous supply of electricity for customers at the proper voltage and
frequency.
Substation – an assemblage of equipment for the purposes of switching and/or changing
or regulating the voltage of electricity prior to transmission or distribution.
Time of Use Rate – a rate schedule where the price of electricity varies on a specified time
of the day, usually high at peak periods.
Transformer – a device used for changing the voltage level either for transmission or local
consumption.
Utility – see distribution utility.