Predicting Natural Gas Useage is an Art

By Thomas Content of the Journal Sentinel
Posted: Jan. 9, 2010 4:00 p.m.

Wisconsin residents have something to brag about during our long, hard winters.

We can take the bitter cold better - and we don't jump to crank up the thermostat as fast as folks who live farther south.

That's the assessment of Marquette University researcher Ron Brown, who runs a business and educational venture, GasDay, serving one-fifth of the homes in the nation that heat with natural gas.

"One of the things we're doing research on right now is trying to model better how people turn their furnaces on and off," Brown said. "If you have a cold day in September, the tough people here in Wisconsin say, 'It's September. We're not going to turn on the furnace.' "

In other states, Brown has found variation in how warm people keep their homes.

"The farther south you go, the warmer people set their thermostats, Brown said. "We can take the cold better than the people in the South."

On days when it's time for Wisconsin residents to crank up the heat, Brown and students are at work helping utilities forecast how much natural gas homeowners across Wisconsin and beyond will consume.

Using mathematical models built with reams of historical weather and natural gas usage data, the team sends daily forecasts to We Energies and utilities around the country.

The forecasts help utilities decide how much gas to buy on a particular day - and avoid buying too much gas on a day when customers don't use as much as expected.

Case in point: the Arctic blast that gripped much of the nation last week. While Milwaukee's temperatures were below normal, the cold wave that struck Springfield, Mo., was the coldest the city had seen in 13 years.

GasDay's been working with the local utility in Springfield for the past decade, and it paid off last week, said Ron McManus of City Utilities of Springfield. The GasDay forecast for how much natural gas Springfield's 82,000 residents would use was right on the mark.

"It was very, very close to what the actual gas level turned out to be," McManus said. "If GasDay does a good job for us, we can reap a little bit of a financial reward. We're a municipal utility, so that just gets passed on to our customers."

Launched in 1993, GasDay has seen growth in recent years, thanks in part to a wave of utility industry mergers that have added more clients, said Brown, director of GasDay and an associate professor at Marquette.

Marquette doesn't release detailed financial information about GasDay. It wasn't designed as a profit-making enterprise, Brown said, but as a university technology transfer activity that supports research and educational opportunities for students. The program is self-funded, Brown said, bringing in enough revenue to cover business expenses, provide research support for two faculty members and fund salaries for three full-time employees and roughly 20 part-time graduate and undergraduate students.

The project could have become a spinoff business for Brown, but he wanted to keep the focus educational, providing hands-on training for engineering and computer science students.

"If I was interested in getting rich, I would be off campus somewhere, as a spinoff," Brown said. "Running a business inside the university with undergraduate students is not the most efficient thing to do, because they only work 10 or so hours a week between their classes. It's a part-time job for them, and a bunch of them graduate every year. So every May I have an awful lot of talent walk out the door. So we're continually dealing with the turnover of students."

The model projects how much natural gas will be used by utility customers based on historical data and short-term weather forecasts for a given area.

For We Energies, the GasDay program sends out about 14 forecasts four times a day, targeting projected natural gas use in various parts of Wisconsin and Michigan's Upper Peninsula.

Gas buyers at We Energies can then notify the operators of the various pipelines that ship natural gas into the state how much they will buy during the coming day.

"They'll change their source of gas for a fraction of a cent difference in price to save money," Brown said.

Saves utility money

Jim Voss, manager of gas purchasing at We Energies, said the Marquette partnership has been a strong one and that the GasDay model has worked well to save the utility from facing penalties from companies that operate natural gas pipelines on the coldest days of the winter. Customers' gas use on such days is often tough to forecast.

"It saves us when we have the very, very cold weather. Obviously the pipelines only have a certain amount of capacity that they can move the gas across, so we need to be as accurate as we can in projecting out our demand," Voss said. "The pipelines, to protect themselves, have some very significant cost penalties if we would take more gas than we're entitled to."

It's hard to quantify how much the utility has saved over the years because of GasDay, but Voss estimates savings in excess of $1 million per year in fees paid to pipeline operators. GasDay also contributes to a more efficient management of the company's purchase of approximately $1 billion in natural gas each year. Every 1% not spent on natural gas represents savings of $10 million.

The project started more than 15 years ago when utility officials expressed frustration to Brown that they didn't have a good handle on how much natural gas customers were going to use on a given day.

GasDay now has 22 customers in 21 states and is running demonstrations for four potential new customers.

"This is far and away our best year," Brown said.

Good experience

Wisconsin's had some below-zero wind chills already this winter, but its memorable bitter cold snaps include 1994 and, most recently, February 2007. Milwaukee closed public schools for two days as temperatures fell to 12 below zero with wind chills of 31 degrees below zero.

Marquette University and GasDay remained open for business.

"I told my students to get out and play in it because it was a day we were going to be talking about for a long time to come," Brown said.

The hands-on training provides engineering students with the opportunity to become more productive workers after they graduate. One former GasDay student employee was named new hire of the year by her employer, Cypress Semiconductor.

"It's because she learned how to talk to people from different disciplines and learned how to solve problems and communicate. That's a great skill to teach an engineer," Brown said.

Becky Kohl, 19, of New Berlin started working at GasDay last summer and found it a much better job for her than "typical teenager work."

"I like the fact that it's a real job," she said.

And it's keeping her ahead of the pack in class, too. When her computer science class started learning how to batch files, that was something she'd already been doing - in the GasDay lab.

Nathan Wilson worked at GasDay as a student and now leads the software development team as an employee.

The job gives him training in managing other software developers and gives him more challenging work than most new grads get in their first engineering jobs, he said.

"It's great, especially with the job market the way it is," he said.

Some are tougher

For Voss and managers of natural gas for other utilities, the worst nightmare is running out of natural gas on the coldest day of the year. But customers don't always crank up the heat at the first sign of cold weather.

The typical customer reaction on Day One: Put on a sweater. But if a bitter cold snap persists, we turn up the heat if we're feeling chilly on Day Two.

"We call it the 'heck-with-it hook,' " Brown said.

But Badger State residents should hold off on bragging too much about how hardy we are.

Said Brown, "We just started forecasting loads in Alaska, and they're tougher than we are."