Hot or Not                  DLC Program Benchmarks: How Do                  You Compare?                                  ...
Agenda     Overview and Preface     DLC Survey Results and Analysis     Musings on the Future of DLC2                     ...
Who is E Source     Mission Statement: To advance the efficient and      environmentally sound use and provision of energ...
2011 Heat Wave Rolls Across the U.S.    Source: National Oceanic and Atmospheric Administration4                          ...
Background: 2011 Regional Demand    Records    July                      Peak demand     New electricity demand records: ...
DLC Member Inquiries      What kind of baselines                                                      What are typical par...
2012 DLC Benchmarking Effort     Industry-wide      benchmarking analysis of      DLC programs      Source to inform uti...
Participation                                                            Current Total Participants             Florida Po...
Participation Rates                                  5,000,000                                                         Res...
Participation Rates                                                               Small Business Participation Rates      ...
Participation Rates by Program Age                                  Residential Participation vs. Program Age             ...
Incentives                                 Distribution of Incentive Methods                                         Month...
Does Incentive Type Impact Participation     Rates?                                                                       ...
14                                                                                                                        ...
Participation Rates      Take Away: One size doesn’t fit all      Program participation rates depend on various factors ...
Load Impacts: Overall Program                                                        Total Available Capacity (MW)        ...
Load Impacts: kW per Participant                              kW Controlled/Program Participant                       1.80...
Marketing DLC Programs      Basic is the mainstay       Direct-mail and email are the most cost-effective       Nearly ...
Marketing and New Participants                                                  Marketing Spending & New Participants     ...
DLC Vendors                  Technology Vendor     Utilities Using Vendor*                       Cooper                   ...
How Advanced Are They?                                         Real-time participation           Web-enabled remote       ...
What About Dynamic Pricing?                                            Customers can        What kind of                  ...
Musings On The Future of DLC23                            www.esource.com || © 2012 E Source
Where Do We Go From Here?      Most programs are still legacy programs        Old technology + limited functionality = l...
For More Information     Jonathan Nelson     Research Analyst, Research, E Source     303-345-9164 jonathan_nelson@esource...
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Direct Load Control (DLC) Program Benchmarks

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E Source Research Analyst, Jonathan Nelson, spoke at the 2012 spring conference hosted by the Advanced Load Control Alliance. In his presentation he provided detailed information on direct load control (DLC) survey results from North American utilities.

For more information: http://www.esource.com/public/products/frs_edrp.asp

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Direct Load Control (DLC) Program Benchmarks

  1. 1. Hot or Not DLC Program Benchmarks: How Do You Compare? Jonathan Nelson Research Analyst, E Source Advanced Load Control Alliance-Spring 2012 Meetingwww.esource.com Thursday, April 5th, 2012
  2. 2. Agenda Overview and Preface DLC Survey Results and Analysis Musings on the Future of DLC2 www.esource.com || © 2012 E Source
  3. 3. Who is E Source  Mission Statement: To advance the efficient and environmentally sound use and provision of energy.  Membership-based energy advisory service  Utilities are our focus  Unbiased research and analysis  Fuel-neutral  Product-neutral  Vendor-neutral  Program-neutral3 www.esource.com || © 2012 E Source
  4. 4. 2011 Heat Wave Rolls Across the U.S. Source: National Oceanic and Atmospheric Administration4 www.esource.com || © 2012 E Source
  5. 5. Background: 2011 Regional Demand Records July Peak demand  New electricity demand records: RTO (MW) Date ERCOT, MISO, and PJM MISO 103,975 July 20, 2011  Economic and emergency DR events PJM 158,450 July 21, 2011 initiated in Mid-Atlantic (e.g. BGE) ERCOT 68,379 August 3, 2011  NYISO and ISO-NE just barely missed © E Source; data from ERCOT, MISO, PJM their records. August  Lingering heat in southern states  ERCOT sets another record  Two DR events on the shoulders of the month (August 4 and 24)  Dallas news headline: ERCOT warns of ‘high probability’ of rolling blackouts as heat wave strains power grid5 www.esource.com || © 2012 E Source
  6. 6. DLC Member Inquiries What kind of baselines What are typical participation are used in direct-load rates for DLC programs? control programs? What vendors deliver and manage DLC programs? What kind of incentives do utilities give to customers participating in DLC programs? What’s the mix between 1-way and 2-way communicating What are some typical figures technologies for DLC? for load per customer in other utility DLC programs? What roles do enabling technology and utility DLC Can you provide attrition rates programs play in dynamic from other DLC programs? pricing?6 www.esource.com || © 2012 E Source
  7. 7. 2012 DLC Benchmarking Effort  Industry-wide benchmarking analysis of DLC programs  Source to inform utilities on trends in technology, DLC program design and performance  Current sample includes data from 23 utilities  Data includes:  Participation  Load impacts  Incentives  Technologies  Vendors7 www.esource.com || © 2012 E Source
  8. 8. Participation Current Total Participants Florida Power and Light 819,500 Xcel Energy (MN) 375,000 Pacific Gas and Electric 164,950 Xcel Energy (CO) 149,000 Louisville Gas and Electric 138,700 Duke Energy (NC) 123,000 Rocky Mountain Power 104,921 Commonwealth Edison 73,000 Progress Energy Carolinas 71,000 MidAmerican Energy 63,129 Duke Energy (IN) 51,000 Alliant Energy 48,000 Dakota Electric Association 46,400 KCP&L 41,433 Idaho Power 37,000 Dominion 35,146 PNM 32,177 SMECO 32,000 Vectren Energy 27,600 Wisconsin Public Service 25,500KCP&L-Greater Missouri Operations 11,199 Hoosier Energy 7,100 Roseville Electric - City of Roseville 3,800 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Current Total Participants (Res and SB) Source: E Source8 www.esource.com || © 2012 E Source
  9. 9. Participation Rates 5,000,000 Residential Participation Rates 60.0% 50.0% 4,000,000 Total Residential Customers Participation Rate 40.0% 3,000,000 30.0% 2,000,000 20.0% 1,000,000 10.0% 0 0.0% Total Residential Customers Residential Participation Rate Source: E Source9 www.esource.com || © 2012 E Source
  10. 10. Participation Rates Small Business Participation Rates 500,000 30% 25% 400,000 Eligible Small Business Customers 20% Participation Rate 300,000 15% 200,000 10% 100,000 5% 0 0% Dakota Xcel Energy Pacific Gas Louisville Gas Florida Power Vectren PNM Electric (MN) and Electric and Electric and Light Energy Association Eligible SB Customers 200,000 49,437 450,000 100,000 330,000 20,000 5,000 SB Participation Rate 7% 6% 1% 5% 6% 3% 28% Source: E Source10 www.esource.com || © 2012 E Source
  11. 11. Participation Rates by Program Age Residential Participation vs. Program Age 30 60.0% 25 50.0% Participation Rate 20 40.0% Program Age 15 30.0% 10 20.0% 5 10.0% 0 0.0% Program Age (years) Residential Participation Rate Linear (Residential Participation Rate) Source: E Source11 www.esource.com || © 2012 E Source
  12. 12. Incentives Distribution of Incentive Methods Monthly Bill Discount 4% Non-Cash Incentive One-time Enrollment 9% Incentive 9% Yearly incentive 39% Monthly Bill Credit 39% n = 23 Source: E Source12 www.esource.com || © 2012 E Source
  13. 13. Does Incentive Type Impact Participation Rates? Residential Utility Incentive Type Participation Rate Louisville Gas and Electric monthly bill credit 17.4% Idaho Power monthly bill credit 9.4% Commonwealth Edison monthly bill credit 2.1% Alliant Energy monthly bill credit 11.8% Hoosier Energy monthly bill credit 2.6% Vectren Energy monthly bill credit 21.1% Dakota Electric Association monthly bill credit 48.0% Duke Energy (NC) monthly bill credit 7.8% Wisconsin Public Service monthly bill credit 6.7% Xcel Energy (MN) monthly bill discount 33.2% KCP&L no cash incentives 9.2% KCP&L-Greater Missouri Operations no cash incentives 4.1% Pacific Gas and Electric one-time enrollment incentive 3.5% Duke Energy (IN) one-time enrollment incentive 7.5% Xcel Energy (CO) yearly 12.9% Rocky Mountain Power yearly 14.9% PNM yearly 6.5% Progress Energy Carolinas yearly 6.6% Florida Power and Light yearly 20.0% Dominion yearly 1.7% Roseville Electric yearly 8.1% MidAmerican Energy yearly 11.5% SMECO yearly 23.5% Source: E Source13 www.esource.com || © 2012 E Source
  14. 14. 14 $0 $10 $20 $30 $40 $50 $60 Commonwealth Edison Louisville Gas and Electric Vectren Energy Idaho Power Alliant Energy Duke Energy (NC) Monthly Bill Credit Hoosier Energy Incentive Amount Wisconsin Public Service Dakota Electric Association Roseville Electric - City of Roseville Rocky Mountain Power Florida Power and Light PNM Progress Energy Carolinas Yearly Incentive MidAmerican Energy Residential Participation Rate (entire territory) Dominion Xcel Energy (CO) Incentive amount probably doesnt matter so much! SMECO Do Incentives Impact Participation? Source: E Source 0.00%www.esource.com || © 2012 E Source 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Penetration Rate
  15. 15. Participation Rates  Take Away: One size doesn’t fit all  Program participation rates depend on various factors that are defined by individual utility needs and strategic planning15 www.esource.com || © 2012 E Source
  16. 16. Load Impacts: Overall Program Total Available Capacity (MW) Florida Power and Light 999 Xcel Energy (MN) 395 Duke Energy (NC) 175 Louisville Gas and Electric 152 Xcel Energy (CO) 150 Pacific Gas and Electric 138 Commonwealth Edison 112 Progress Energy Carolinas 90 MidAmerican Energy 67 Idaho Power 47 PNM 39 SMECO 37 Alliant Energy 36 KCP&L 36 Dominion 35 Wisconsin Public Service 32 Vectren Energy 25 KCP&L-Greater Missouri… 11 Hoosier Energy 9 Roseville Electric 4 0 200 400 600 800 1000 MW Controlled Source: E Source16 www.esource.com || © 2012 E Source
  17. 17. Load Impacts: kW per Participant kW Controlled/Program Participant 1.80 1.60 1.40 kW Controlled 1.20 1.11 1.00 0.80 0.60 0.40 0.20 0.00 Utility kW per Participant Average Source: E Source17 www.esource.com || © 2012 E Source
  18. 18. Marketing DLC Programs  Basic is the mainstay  Direct-mail and email are the most cost-effective  Nearly as effective as traditional options (TV, print, radio, telemarketing)  Value Propositions that Motivate Customers  Cash  Convenience  Ease of participation  Serving the collective good  Segmentation Matters  Different customer segments are motivated by different messages Source: E Source18 www.esource.com || © 2012 E Source
  19. 19. Marketing and New Participants Marketing Spending & New Participants $2,000,000 35,000 $1,800,000 30,000 $1,600,000 25,000 $1,400,000 New Participants Marketing Spending 20,000 $1,200,000 $1,000,000 15,000 $800,000 10,000 $600,000 5,000 $400,000 - $200,000 $- Progres (5,000) Florida Louisvill Pacific Rosevill Commo MidAme Xcel s Alliant Power Idaho e Gas Gas Dominio e nwealth rican SMECO Energy Energy Energy and Power and and n Electric Edison Energy (CO) Carolina Light Electric Electric s Marketing Spending Last Year $15,000 $17,000 $30,000 $36,202 $43,916 $66,000 $184,680 $762,000 $1,319,4 $1,320,0 $1,770,0 $1,800,0 New Participants 1,200 300 5,000 574 8,163 13,312 6,156 20,140 17,057 24,890 19,000 32,000 Source: E Source19 www.esource.com || © 2012 E Source
  20. 20. DLC Vendors Technology Vendor Utilities Using Vendor* Cooper 13 Comverge 9 Honeywell 3 Aclara 3 Entek 1 Gridpoint 1 Tantalus 1 *Some programs use more than one Source: E Source20 www.esource.com || © 2012 E Source
  21. 21. How Advanced Are They? Real-time participation Web-enabled remote Utility verification? programming of devices? KCP&L no yes KCP&L-Greater Missouri Operations no yes Xcel Energy (CO) no no Xcel Energy (MN) no no Rocky Mountain Power no no PNM no no Progress Energy Carolinas no no Pacific Gas and Electric no yes Louisville Gas and Electric no no Idaho Power no no Florida Power and Light yes, via power-line carrier no Dominion no no Commonwealth Edison yes, via customers meter yes Alliant Energy no no Hoosier Energy yes, via power-line carrier no Roseville Electric no no Vectren Energy no no Dakota Electric Association no no Duke Energy (NC) no no MidAmerican Energy no no Duke Energy (IN) no no Wisconsin Public Service no no SMECO no no Source: E Source21 www.esource.com || © 2012 E Source
  22. 22. What About Dynamic Pricing? Customers can What kind of Utility participate in dynamic pricing dynamic pricing? program? KCP&L yes TOU KCP&L-Greater Missouri Operations yes TOU Pacific Gas and Electric yes CPP, PTR Commonwealth Edison yes HP Source: E Source22 www.esource.com || © 2012 E Source
  23. 23. Musings On The Future of DLC23 www.esource.com || © 2012 E Source
  24. 24. Where Do We Go From Here?  Most programs are still legacy programs  Old technology + limited functionality = limited options  New opportunities for DLC  FERC Order 745: DR can compete with supply side resources in electricity markets – PJM first to comply (4/2/2012)  Ancillary Services: Non-Spinning and Spinning Reserves, Frequency Regulation (FERC Order 755)  Requires more advanced programs and technology  Rather than just shaving the peaks, DLC can be a robust tool to meet routine demand needs.  What needs to happen to get us there?24 www.esource.com || © 2012 E Source
  25. 25. For More Information Jonathan Nelson Research Analyst, Research, E Source 303-345-9164 jonathan_nelson@esource.com Have a question? Ask our experts: www.esource.com/question25 www.esource.com || © 2012 E Source

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