For nearly 40 years, NIPCO has been powering forward as a pioneer in smart energy management. In August 1984, NIPCO’s board of directors approved an innovative load management program that has since saved our members millions of dollars by strategically controlling electrical usage during peak hours. The program became known as “Switch Makes Cents” and, to date, nearly 18,000 load control switches operate within the NIPCO service territory.
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 39 megawatts (MW) in the Summer and 33 MW in the Winter...the equivalent of powering approximately 1,700 homes! These savings are achieved by reducing total demand during times of peak use for both residential and commercial, industrial, and agricultural loads by cycling off qualifying equipment such as water heaters, air conditioners, irrigators, electric vehicle chargers, backup generators, and high-density computing facilities (HDCF).
The Energy Landscape is Changing
Today, the electric industry faces a new challenge: the emergence of blockchain computing facilities (BCF) and HDCF facilities. These new “super” energy consumers have unique power consumption patterns fundamentally different from traditional residential and commercial/industrial/agricultural (CIA) users.
Historically, NIPCO’s load control program has been a delicate balancing act. By controlling electric loads like water heaters, air conditioners, and irrigation systems during high-demand periods, NIPCO has consistently saved its members an average of $3.5 million annually in avoided purchased power costs. These controlled loads significantly contribute to managing peak energy demands efficiently.
What’s Happening Now
The arrival of BCF/HDCF operations has disrupted traditional approaches and policies for managing loads across the United States. NIPCO is no different. These facilities:
Add significant electrical load
Operate differently from traditional consumers
Seek to be constantly off-peak
Are increasing NIPCO’s load control occurrences and durations to be longer than historic usage patterns
Since the inception of NIPCO’s load management program, NIPCO has been billed by Basin Electric Power Cooperative, NIPCO’s primary power supplier, for the highest usage data point reached each month. NIPCO, however, bills its Class A Members on the same monthly usage dataset but at the highest usage level when at least 80 percent of the total load was controlled. For this reason, peaks billed by NIPCO do not always align with those billed by Basin Electric. The difference between the Basin Electric peak and NIPCO’s peak at 80 percent load control has, on average, been minimal, and NIPCO “eats” the difference.
Until now, this strategy has served the NIPCO membership fairly, with all members realizing the overall benefit of NIPCO’s load control program. However, with more and more BCF/HDCF loads coming online, monthly usage levels are rising dramatically, forcing a widening “gap” between the Basin Electric usage peak and the peak billed when NIPCO is controlling at 80 percent or greater.
With the added load from BCF/HDCF, NIPCO’s increasing demand charges are ultimately socialized across the entire NIPCO family of cooperatives, resulting in an imbalance of costs among members with large BCF/HDCF growth and those without.
NIPCO’s New Strategy
To maintain rate stability and fairness across the NIPCO family of cooperatives, NIPCO’s Board of Directors approved making critical adjustments to its load control strategy, effective December 1, 2024. NIPCO will continue to offer load control to BCF/HDCF loads currently enrolled in the program, but participants are aware their load will be controlled more often and for more extended periods. Other adjustments include:
Synchronizing our billable peak with our primary power supplier (Basin Electric)
Implementing an “Interruptible 5/7” load control schedule for qualifying BCF/HDCF members
Stretching some load control durations as long as eleven hours to reduce the total demand of energy now inflated by the emergence of “super loads”
What an Interruptible “5/7” Rate Means for Members
Historically, NIPCO’s seasonal load control strategy allows control year-round, based on Summer and Winter seasons. Control strategies during these seasons align with high heating and cooling periods during the daytime: 2-7 PM in the Summer and 7 AM – 7 PM in the Winter.
The newly adopted “Interruptible 5/7 Rate” follows a Basin Electric policy that provides a special rate incentive for these new, qualifying BCF/HDCF members who participate in load control during seven months of the year (January, February, June, July, August, November, and December). The remaining five months will have no load control.
This program reduces the number of load control occurrences over the course of the year, but control occurrences may be longer and more frequent during the seven months when NIPCO will execute load control. While this sounds challenging, it’s actually a carefully designed strategy to balance the needs of all our members while keeping electricity affordable and reliable.
Why This Matters
These changes ensure that NIPCO remains adaptable, innovative, and committed to serving the evolving energy needs of our membership and all Switch Makes Cents users – residential, commercial, industrial, and agricultural.
Stay Informed
NIPCO remains committed to transparency, keeping our membership informed of this growing challenge and working with them to establish a resolution. While this strategy addresses the current power needs of the NIPCO family, NIPCO and its members understand that, as situations evolve, there may be the potential to re-evaluate. Together with its members, NIPCO continues to power our community’s future.
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