The Challenge

In late 2006, Stanley Works, an S&P 500 company and diversified worldwide supplier of tools and engineered solutions for professional, industrial, construction and do-it-yourself use, and security solutions for commercial applications, was contacted by CPower to enroll its Connecticut manufacturing facilities in demand response programs offered by the Independent System Operator of New England (ISO-NE). ISO-NE, as part of its commitment to promoting regional grid sustainability, offers programs that provide significant financial incentives for end users of electricity to curtail, or reduce, their electricity during times of electric grid stress, high electricity prices or emergency situations that may lead to blackouts or brownouts. These range from programs that require participants to curtail with 30 minutes notice, to a Demand Response Reserves program, currently in its pilot phase, which requires participants to curtail within 10 minutes, but has much shorter events.

At first, Stanley Works’ staff was hesitant to participate in a demand response program. They were concerned that it might adversely affect manufacturing operations and overall ability to carry out its core business. “Our core competency is manufacturing - not running a power grid,” stated Kurt Link, the facilities manager for the Stanley Tools’ New Britain, Conn. plant. “We don’t want to compromise our ability to support customer demand for our products.”

After several meetings with CPower, Stanley Works felt that the flexibility of the ISO-NE’s programs, coupled with its attractive incentives, made participation viable, sensible and socially responsible. Stanley Works’ decision to participate was not solely motivated by the financial benefits of program incentives and energy savings, but also by its concern over the increasingly fragile electric system, particularly in Connecticut; this led the firm to enhance its corporate citizenship initiative. “Once we better understood the requirements and flexibility of the program we felt we would be able to manage the Demand Response program. With our participation along with other high power users in our area we can work together with CPower & ISO-NE to help develop a more robust power grid,” said Link.

The Solution

After an orientation regarding the program options, followed by a detailed engineering assessment performed by CPower in close collaboration with Stanley’s facilities and operations management teams, an initial curtailment plan was developed for the ISO-NE’s 30-Minute program. This first plan was conservative and structured so that any reduced load would not affect production processes or overall operations. Under the 30-Minute program, if the ISO-NE experiences an electrical emergency, Stanley is required to drop load within 30 minutes of notification, for up to four hours. The ISO-NE typically only experiences one electrical emergency per year. With its curtailment plan in place, and its partner, CPower, available for support and risk management, Stanley Works enrolled in the ISO-NE’s 30-Minute program, ready to shed load whenever New England’s electric grid needed some extra capacity. Additionally, Stanley Works realized that taking such a close look at its energy usage would help it find new flexibility in its processes, and could pave the way to increased energy efficiency and, ultimately, permanent load reductions and savings to them.

Once Stanley Works’ staff became comfortable with the logistics of the ISO-NE’s 30-Minute program, they started looking for ways to increase their participation. With CPower’s support, Stanley Work’s staff identified additional load reductions at its primary and secondary facilities. The company even considered implementing a full plant shutdown during the most vital demand response events. Because Stanley Works could reduce a significant amount of load without a full plant shutdown, this did not become a part of their curtailment plan. Instead, Stanley Works decided to expand its participation by enrolling in the ISO-NE’s new Demand Response Reserves (DRR) Pilot program.

The ISO-NE implemented the DRR Pilot program to explore whether demand response could help cover short-term electric capacity shortages. The DRR Pilot requires participants to respond within 10 minutes of receiving notification. Events occur much more frequently, though they typically last about half an hour. From the end user’s perspective the DRR Pilot offers significant opportunities, but also some challenges. For example, DRR Pilot events are much shorter, and the end user can participate in both the DRR Pilot and the 30-Minute program, achieving an additional demand response revenue stream and protection for the electric grid. On the other hand, events are more frequent and response time is shorter, frequently making automated controls necessary. Thus for the right facility, the DRR Pilot is an excellent option; for other facilities, the requirements are too strenuous.

The Results

In Stanley Works’ case, the DRR Pilot was a perfect complement to its participation in the standard 30-Minute program. Because of its success, the company identified a second facility that was well-suited for the DRR Pilot and could accommodate the program’s frequency and duration. To date, Stanley Works has responded to all DRR Pilot events and has met its committed levels of reductions, demonstrating that demand response resources can respond just as quickly and reliably as a power plant. “The conservation programs we have entered into with CPower have turned into a true win-win for our organization and the state. We’ve been able to fairly easily handle our load shed commitments without interrupting our normal business and benefit financially from the incentives, while helping simultaneously to strengthen the power grid in Connecticut,” stated Link.

Stanley Works’ participation in the ISO-NE’s 30-Minute and DRR Pilot programs proves how through demand response, industrial facilities can benefit both the increasingly constrained electric grid and themselves. Since industrial facilities’ staffs thoroughly understand their processes, productions lines, and operations, they can quickly identify flexible electricity loads. With reasonable notice, manufacturers can schedule shift changes, production line reductions and manpower around demand response events, with the option of shutting down most, or all, of the load at a given facility. Additionally, because energy is a significant cost component, facilities will benefit from advanced energy management systems perfect for demand response, for the facility itself, and for helping keep the lights on throughout the state or city.

Currently, Stanley Works is now looking for new ways to reduce year-round energy consumption. One opportunity of great interest is new incentives available through the ISO-NE’s Forward Capacity Market, which allows energy efficiency, load shifting, and distributed generation to receive market-based funding, at the same dollar amounts per kilowatt as power plants. Stanley Works and CPower believe that this could be a lucrative opportunity for the company going forward.