On July 23, Baltimore Gas and Electric (BGE) customers earned more than $2.5 million by reducing their electricity usage during peak summer heat hours. Over 640,000 residences voluntarily participated – nearly an 80% participation rate among those who were notified – amounting to an average bill credit of $6.80, enough to buy an ice cream cone while turning down the air conditioning a few degrees.
BGE is the first utility in the country to put all of its customers with smart meters on a default Peak Time Rebate program.
It works like this: BGE customers with a smart meter can participate in the BGE Smart Energy Rewards program by voluntarily reducing their electricity usage to earn a bill credit of $1.25/kWh saved from 1 p.m. to 7 p.m. on designated energy savings days. Eligible customers will be notified, usually the evening before, by an automated phone call, e-mail, or text message. BGE anticipates that there will be 5 to 10 energy savings days in a summer season.
Smarter Grids, Smarter Customers
BGE has had a traditional direct load control (DLC) residential DR program for many years, and it has been successful within its own parameters. However, the company has been installing advanced metering infrastructure (AMI), as covered in Navigant Research’s Smart Meters report, over the last few years, and with that network comes new capabilities (and regulatory requirements to meet cost-benefit thresholds). AMI provides the utility and potentially customers with near-real-time interval meter data, so the utility can send time-based price signals and get almost immediate feedback on customer performance. Couple these abilities with new end-user device and thermostat technologies that enable fast response and remote control by the customer, and you have more customer-centric, flexible demand response (DR) programs than were possible before; this can increase customer penetration rates dramatically.
Right on Time
Other innovative companies are trying different variations of programs and pricing offerings. The Sacramento Municipal Utility District (SMUD) is looking to become the first utility to have a default time-of-use (TOU) rate after running a successful pilot that showed that customers preferred TOU structures to their standard flat rate. The guiding principles of Oklahoma Gas and Electric (OG&E) for DR include voluntary participation for customers and no DLC by the utility, relying completely on customer empowerment. OG&E believes that pairing dynamic pricing with technological devices will achieve these goals. The province of Ontario, Canada has instituted default TOU pricing for customers with smart meters since 2005, the only area in North America to do so. A traditional DLC program already existed in the province, and now the plan is to combine the control ability of the DLC with TOU pricing to help customers respond to price variations. Massachusetts is set to become the first U.S. state to mandate default critical peak pricing (CPP) based on a recent order by the Department of Public Utilities.
All of these developments and other innovative programs are covered in Navigant Research’s new report, Residential Demand Response. The report discusses industry trends around the world and provides 10-year forecasts of sites, capacity, and revenue, including breakouts between DLC and dynamic pricing. Over time, all these different pilot projects will blossom into full-blown programs and expand into other jurisdictions, creating a truly responsive demand side of the energy equation.
Tags: Demand Response, Energy Management, Home Energy Management, Smart Utilities Program, Utility Innovations
| No Comments »