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Switch Makes Cents

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Why the Switch: A History Lesson

In 1973, energy studies revealed that a larger source of power would be necessary to keep up with NIPCO's load growth. NIPCO purchased a share of the Neal 4 generating plant to provide its member systems with the power requirements needed, according to periodic load forecasts performed. Neal 4 began commercial operation in 1979. About the same time, NIPCO’s annual energy sales began to decline due to climbing oil prices, energy conservation measures, the farm crisis, and the loss of a large commercial load. With the economy not, quickly, rebounding, energy sales declining, and no load growth expected in the foreseeable future, NIPCO’s electric rates began to increase. NIPCO and its member systems aggressively worked to identify ways to relieve the member-owners from the financial burden of excess capacity.

George Neal 4 is a coal generation station owned by Mid-American Energy and is located south of Sioux City, Iowa.

In August of 1984, the NIPCO Board approved a proposal to develop a system-wide energy marketing and load management program, named, “Switch Makes Cents”. The program began offering rebates to install new electric loads and special rates to member-owners who would allow specified heating and cooling equipment to be controlled during peak conditions. Eventually, the program was expanded to include water heating, irrigation, and generators.

Photo of an agricultural irrigation system (source: Pixabay)
From the beginning, NIPCO Member cooperatives have utilized the Switch Makes Cents program to help manage the energy consumption for farms, homes, and businesses in western Iowa. (Image: Pixabay)
A photo of an early ad, circa 1984, along with the words "Trusted faces promoted program benefits."

The primary goals established were to increase energy sales, stabilize consumer rates, improve load factors, and to reduce purchased power costs. The goals were achieved through installation of the load management system and an intensive marketing effort.

The robust advertising campaign, led by the Wm. Bass Agency of Sioux City, was launched to educate member-owners about the programs and its benefits. NIPCO and its member systems worked to encourage member-owners to participate in the program by installing a radio-controlled “switch” on qualifying equipment. The advertising, left, promotes the Switch Makes Cents as a means for energy efficiency and saving money. Get a closer detail of the ad, published circa 1984.

In 1991, NIPCO and its Class A Members were the recipients of The Silver Switch Award at the National Food and Energy Council's (NFEC) Annual Meeting, held in St. Louis, Missouri. The award provides national recognition to those electric utilities that, though demonstrated team effort, have developed an electric energy-for-agriculture program that, first and foremost, benefits the agricultural constituents they serve, but which has direct or indirect benefits to the electric utility and/or its neighbors. The award recognizes NIPCO's collaboration in the development and execution of the program, how well economic and/or social objectives were met and the degree that internal and external cooperation was achieved to meet the objectives.

When electric demand grew to a certain level during peak conditions, the switch allowed NIPCO to cycle the participating equipment off and on, thus saving electricity and decreasing electric costs. Once demand decreased, the equipment would return to operating normally.

Why the Switch Still Makes Cents

The Switch Makes Cents load management program operates year-round, and follows a seasonal strategy to reduce NIPCO's system peak by as much as 20 megawatts (MW) in the summer and 12 MW in the winter...the equivalent of powering approximately 3,200 homes! This is done by reducing total demand during times of peak-use, generally between 6-10AM and 3-9PM, when people are commonly at home running washers, dryers, dishwashers, air conditioners, heaters and so on.

Class A Members of NIPCO offer Switch Makes Cents as a resource for electric load management.

Member-consumers who sign up for the program receive incentives to connect qualifying equipment to switches which are controlled by either a radio or cellular signal which is carried through the cooperatives' distribution power lines. On days when the demand for electricity is nearing peak levels, a signal is sent to the load control switch to interrupt the connected equipment. The combined effect of all the switches on our system allows for a reduction in peak demand.

This, in turn, helps reduce the need to purchase more power and lower's everyone's power bill. Air conditioners, water heaters, electric heating applications (duel fuel and storage heat), irrigators, and generators qualify for the Switch Makes Cents load management program. RECs install the Load Management switches to the specified equipment in member locations, free of charge. This switch allows the connected unit to be interrupted for brief intervals of operation during those times of peak demand.

To learn more about the Switch Makes Cents program provided by each member in the NIPCO system, visit their website or contact one of their Customer Service Representatives.

NIPCO Members