Two southwestern Pennsylvania businesses have become the first to take advantage of a new federal regulation that will enable them to generate revenue while lending a helping hand to the region's electricity grid.

Axion Power International, a lead carbon battery maker, and Pennsylvania American Water's water treatment facility in Washington County signed up for a program this week that will pay them to go off the grid for short periods of time.

PJM Interconnection, the nation's largest grid operator, will call on them to correct for short-term spikes in electricity use that can affect the balance of supply and demand. PJM manages electricity for 13 states, including Pennsylvania.

The curtailment service works like this: PJM sends a signal to the companies in the program announcing it's looking for someone to curb use. Axion and Pennsylvania American Water, through third-party aggregators, tell PJM if they're willing and how much they want to be paid in exchange for clearing off the grid for a certain period of time.

If PJM accepts Axion's bid, the company's manufacturing building in New Castle switches from drawing power from the grid to pulling it from its PowerCube, a battery it has developed and hooked up to the building.

The entire negotiation takes place in a few seconds and, according to Tom Granville, Axion's CEO, doesn't have the slightest effect on operations at the New Castle facility.

The same goes for Pennsylvania American Water's E.H. Aldridge water plant. If its bid is accepted, the water pump stops operating and water builds up in the reservoir awaiting later treatment, while the company gets paid the same rate as a power generation source would get paid for making the equivalent amount of power that the treatment plant is saving.

Traditionally, demand response services like this have been the purview of large consumers and generators - when the grid is overloaded on a very hot day, industrial facilities get paid to shut down for hours to ease the load, while generation plants are brought online to add power.

But with real-time software that can negotiate these kinds of balancing activities on a much smaller scale with many more participants, the PJM is increasing its use of them.

"Demand side resources are far superior to generation," said Stu Bresler, vice president for PJM Market Operations and Demand Response. "They are both faster and more accurate."

For Axion, this is a demonstration of how its PowerCube can help industrial loads supplement grid power, Granville said.

"Axion allows them to both maintain their power sources' reliability and provide a revenue stream," said Audrey Zibelman, president and CEO of Viridity Energy Inc., a Philadelphia-based aggregator that brokers Axion's participation in the program.

Zibelman estimates that for every megawatt of power working around 8,000 hours a year, a facility can make around $200,000 a year from the PJM.

"That, for many people, can be the difference between making an investment and not making an investment in something like solar resources," she said.

Loads that agree to curtail as part of this service are paid the same as generation sources per kilowatt hour. Granville said the PJM is typically looking for short periods of curtailment - around an hour - and said he anticipates the New Castle facility will bid on these opportunities on a daily basis.