PASADENA, CA, and WINDSOR, CO — The Southern California Public Power Authority and Ice Energy are launching a project to shift 53 megawatts of peak-time power consumption to hours of lower demand by deploying units that make and use ice to run air conditioners.

SCPPA, which represents 11 municipal utilities and an irrigation district serving about 2 million customers, and Ice Energy, based in Colorado, announced their agreement today to work on what they describe as the first utility-scale, distributed energy storage project in the United States.

"We now have a convenient and cost-effective solution for addressing peak demand," SCPPA Energy Systems Manager David Walden said in a webcast news conference.

"This is a historic day for the utility industry and in recognition for the role that energy storage will continue play" in reducing peak demand," said Chris Hickman, Ice Energy's executive vice president of utility solutions.

For utilities, energy storage systems are considered key Smart Grid components because of their capacity to store energy efficiently and dispatch it when and where needed.

Founded seven years ago, Ice Energy developed its Ice Bear Distributed Energy Storage System to work with standard rooftop air conditioning units on small to midsized commercial buildings.

At night, when demand on the grid is low, the Ice Bear goes in to "ice charging" mode, freezes 450 gallons of water and stores it.

During the day when the grid reaches peak demand levels, typically between noon and 6 p.m., the Ice Bear goes into "ice cooling" mode. It takes over from the air conditioner's energy-intensive compressor and cools the hot refrigerant using the ice made the night before. The cooling cycle lasts at least six hours until the ice completely melts, at which point the AC compressor goes back on the job and the ice making and cooling cycles begin again.

Installation for SCPPA will begin in the first half of the year and rolling deployment will take about two years. About 1,500 government, commercial and industrial buildings -- retrofits and some new construction -- will be involved, Hickman said.

The power authority and the company say that the project will permanently reduce demand peak electricity demand and, when complete, can shift as much as 64 gigawatt hours of on-peak consumption to off-peak times annually. The power authority estimates that the shift can offset enough peak demand to serve the equivalent of 10,000 homes.