North Carolina Electric Cooperatives Run Successful Water Heater Pilot

In the 1980s and 1990s, the North Carolina Electric Membership Corporation (NCEMC) managed a water heater load control program for demand response. When a peak demand period was anticipated – typically a very cold early morning in the winter and an afternoon or early evening on a hot summer day – NCEMC could turn off connected water heaters for the duration of the event. Peak periods can be very expensive for cooperatives, which purchase a portion of their electricity from wholesale markets and suppliers, so reducing coincident demand would be a big help. With over 80 percent of North Carolina cooperative members using electric water heaters in their homes, they offered a great opportunity.

Approximately 20 percent of NCEMC’s cooperatives’ members had water heater and HVAC load control switches installed. The program worked well initially; however, its long-term effectiveness was limited. The main issue was that the switch, the best technology at the time, enabled only one-way communication, so while NCEMC could direct water heaters to turn on or off, the cooperative was unable to hear back from the units. This meant it was impossible to determine whether the signal was actually received. Homeowners may have replaced their water heater, removed the switch, or the switch could have failed. Without reciprocal communication, there was no way to know for sure, and unfortunately, the technology to make that a reality was just not available at the time. Fast forward to 2017, and the technology was ready.

Over the past year, NCEMC has worked with Carina Technology and eight participating cooperatives – Cape Hatteras Electric Cooperative, Central EMC, Lumbee River EMC, Randolph EMC, Roanoke Electric Cooperative, South River EMC, Surry-Yadkin EMC and Tideland EMC – to run a new water heater pilot program. Through 4G-LTE or Wi-Fi technology, connected units can both receive signals from NCEMC and send them back, allowing for two-way communication. The result is a better understanding of the effectiveness of the pilot and massive amounts of data to study from the 136 participating units. NCEMC can examine which units are on or off at any given time or drill down into an individual unit’s daily and hourly history. Furthermore, an app allows participating members to see how much energy their water heater has been using.

Findings from the pilot have been promising so far. The first year produced average savings of 0.45 kilowatts (kW) per water heater in the summer and 0.90 kW in the winter, though the numbers varied greatly across participating units. However, while reducing peak demand was one main goal for NCEMC, another was member satisfaction. From the start, NCEMC aimed to ensure that the pilot ran as seamlessly as possible, and that members wouldn’t be aware that their water heaters were being controlled.

“One of our primary goals of this program is that this is seamless and invisible to the member,” said Rick Schroeder, energy specialist for NCEMC and pilot project leader. “Once we put the device on their water heater, they forget it. They don’t even know it’s working in the background. We did not receive one complaint of a member running out of hot water during the yearlong pilot.”

Indeed, a survey of participating members from the pilot cooperatives revealed that approximately 85 percent never ran out of hot water at all during the yearlong pilot. Those that did report running out of hot water in the survey noted the same problem before the pilot, so the issue does not appear to be a direct result of the control device. “If you ran out of hot water before the device was installed, it certainly does not prevent you from running out of hot water after the device was installed,” noted Schroeder.

Michael Trent, director of innovative energy solutions at Randolph EMC, uncovered similar findings at his cooperative: “We sent out a survey to our members that participated in the pilot, and the members were unaware that they had even participated in any control events. Carina is able to work in the background and still provide hot water without sacrificing comfort for the member.”

In fact, the technology was designed to minimize and ideally prevent the loss of hot water for the consumer. It comes with a built-in override feature, a so-called comfort bump, so that if the Carina controller senses that the top of the tank’s water temperature has dropped to a certain temperature during a demand response period, it automatically overrides the control event until the water temperature at the top of the tank reaches an upper preset temperature. The control event is then reinstated to maximize the demand response harvest. “What makes this product different is that Carina’s controller will turn the water heater back on once it senses that water temperature has dropped to a certain point. This comfort feature helps ensure that the member will not run out of hot water during a control period,” described Trent.

An additional perk of the technology is that it can help identify potential problems with members’ water heaters, such as leaks. “We can let them know within 24 hours that we suspect they have a problem with their water heater,” explained Heidi Smith, manager of marketing and corporate communications at Tideland EMC. Erratic energy consumption patterns identified by the Carina software may be indicative of a bad heating element or a water heater leak. “When a lot of water heaters are located in the homes’ crawl space, hidden from daily view, having the potential to detect a leak is a wonderful feature of this tool,” added Schroeder.

A potential concern with this type of demand response program is that it could trigger an artificial peak when the water heaters are taken out of control. In other words, while reducing the more naturally occurring peak, the technology could produce its own rebound peak just a couple of hours later. For example, consider the end of a demand response event involving thousands of units. Left unmanaged, all of the participating water heaters would turn on at the same time and potentially cause a new peak later in the day. To limit this possibility and keep demand level, NCEMC staggers or “feathers” the units coming online over four hours.

The water heater pilot has been a revelation for NCEMC. Three decades after the original program, the technology has arrived to take it to another level, and participating members and cooperatives have been receptive. “I like whatever produces happy people, and for the water heater switches across the board, people are happy,” said Smith. The pilot even provided relief during the summer of 2017 when Ocracoke Island experienced a weeklong outage after a construction company severed a transmission cable. NCEMC was able to cycle water heaters to ease the load on the region’s generators.

Looking forward, new pilot programs getting underway involve building homes with the necessary “smart” water heater devices and HVAC thermostats already installed. Down the road, residential water heaters may be used as thermal batteries to store energy from renewable sources. For now, though, NCEMC can be pleased with the success it has found to ensure it can continue to provide safe, affordable and reliable electricity to all of its members.