General-interest headlines from 2016 included celebrity deaths, a strange and surprising US election season, and extreme worldwide weather events, but at E Source, we’ve been keeping an eye on trends and themes in demand-side management (DSM). The big news in DSM may not have made many Twitter feeds or front pages, but what follows are some topics from 2016 that we’ve identified as top-of-mind for utility DSM professionals, as well as related E Source content.

1. © E Source
General-interest headlines from 2016 included celebrity deaths, a
strange and surprising US election season, and extreme worldwide
weather events, but at E Source, we’ve been keeping an eye on trends
and themes in demand-side management (DSM). The big news in
DSM may not have made many Twitter feeds or front pages, but what
follows are some topics from 2016 that we’ve identified as top-of-mind
for utility DSM professionals, as well as related E Source content. The
reports we reference in the pages that follow are available to members
of the E Source Demand-Side Management Service. To learn more
about our work in DSM, visit www.esource.com/dsm.
Ten DSM Topics
That Made Waves in 2016

2. Utility DSM teams are always on the lookout for the next big idea, so twice a year we
compile a list of our favorite exciting, new programs and tell you what makes them
innovative in a series of web conferences and reports. In “DSM Roundup 2016: Innovative
Residential Programs,” we highlighted:
■ Getting energy savings from prepay programs
■ Using online marketplaces to improve rebate uptake
■ Southern California Edison’s Save Power Days, a peak-time rebate program that uses smart
thermostats to boost demand savings
■ National Grid Rhode Island’s New Movers Program, which targets new accounts for home
energy reports, leading to an increase in savings from this program type
Innovation
© E Source

3. In response to Hurricane Sandy in 2012—which wreaked havoc on the electrical
grid in New York and demonstrated the grid’s extreme vulnerability—the state
embarked on a major initiative in 2015 called Reforming the Energy Vision (REV).
By using distributed energy resources, energy efficiency, and microgrids to
replace traditional components of the grid (such as power plants, substations,
and feeders), REV aims to help New York withstand the stresses of climate
change. In our report “New York’s Reforming the Energy Vision,” we highlighted
key aspects of the initiative and explained its implications for utilities in other
states as well as for DSM in general.
Utility Business
Models of the Future
© E Source

4. Big Data
Rather than starting with an engineer’s measure recommendation, some DSM
program planners have flipped their design model to begin with customer motiva-
tions and barriers. We covered three examples in “Leveraging Customer Data to
Optimize DSM Program Design and Performance.” Learn how:
■ Pacific Gas and Electric Co. uses personas to optimize its targeting schemes and
improve communications
■ APS adopted a customer propensity scoring system and increased its direct mail
response rate from 1.0 to 5.7 percent
■ Duke Energy shares data between the DSM department and the call center to provide
customized messaging for customers
© E Source

5. Often, the only interaction customers have with utility DSM programs is through the
contactors working in their homes or businesses. These key utility partners can
have a major influence on the success of your programs, which is why we created
the “Utility Trade Ally Network Comparison 2016.” We surveyed trade ally program
managers at 30 utilities across the US and Canada to learn about network
structures, management, and performance. The results were illuminating. For
example, we discovered that a majority of respondents (68 percent) use closed
networks with strict participation requirements. We also learned that about 40
percent outsource the management of their trade ally networks to third parties.
Trade Allies
© E Source

6. © E Source
Thanks to unexpected changes in the recycling
industry—including the abrupt closure of major
US appliance-recycler JACO Environmental—and
quickly rising efficiency baselines, many utilities
are scrambling to save their refrigerator-recycling
programs.
For our “Maintaining a Cost-Effective
Refrigerator-Recycling Program in Challenging
Times” report, we pulled data from E Source DSM
Insights, our online program and portfolio
benchmarking tool, to provide recommendations
for improving the cost-effectiveness of these
staple utility programs. For example, we suggest
moving to an upstream model, focusing on old or
secondary refrigerators, or opening recycling
programs to other technologies or appliances.
Learn more about DSM Insights at
www.esource.com/about-dsminsights.
Refrigerator Recycling

7. The presence of Tesla in the home battery market ensures that this technology garners a
lot of media attention. But how do your customers feel about battery storage? Turns out
they love it! To meet customer demand for this emerging technology, utilities are starting
to offer programs and pilots. We found a dozen customer-sited (behind the meter)
offerings, ranging from traditional rebates to utility-owned-technology pilots. We dug into
these programs and created a first-ever review of “Customer-Sited Battery Storage Pilots
and Programs,” which features data on:
■ Program type and purpose
■ Technology ownership
■ Rebates and incentives
■ Number of customers
■ Sectors
■ Technology partners
Battery Storage
© E Source

8. © E Source
Every year, to help you see how your DSM portfolio stacks up to those of other utilities
across the US and Canada, we collect portfolio- and sector-level data from E Source DSM
Insights for a variety of DSM program types. In 2016, our “DSM Achievements and
Expenditures” report included results from more than 55 electric and gas utilities, and
featured program data from the residential, nonresidential, and low-income sectors as well
as the commercial and industrial (C&I), behavioral, multifamily, new construction, and small
business subsectors.
Our research revealed:
■ Most utilities exceeded their overall savings projections for both electricity and natural gas
■ Residential behavior, multifamily, and new construction programs are playing increasingly
important roles in achieving cost-effective electric savings
■ C&I programs tend to achieve greater gas energy savings per dollar than residential programs
DSM Program Benchmarking

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We’ve been tracking smart thermostat programs since the technology started
showing up in DSM portfolios. In our most recent update of “Smart Thermostat Pilots
and Programs,” we provided data from 75 US and Canadian utilities that offer a total
of 97 pilots or programs centered on smart thermostats. Most of the programs target
energy efficiency, but some enable demand response and others are purely
promotional. Among US states, Illinois and Texas lead the way in number of
programs offered, and Ontario tops the list in Canada.
Smart Thermostats

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More and more electric vehicles (EVs) are rolling off assembly lines and into residential
garages each year, and they represent a huge potential opportunity for utilities. We
examined EV trends in “How Utilities Are Taking Charge of Electric Vehicle Adoption” and
made several surprising discoveries.
Time-of-use (TOU) rates are the most common utility incentive mechanism for EVs—35
utilities in 17 states embrace this model. TOU rates can be a win-win for customers and
the utility because they offer customers an incentive to charge during off-peak hours while
smoothing peaks and valleys for utilities.
EV buyers are less satisfied with their sales experience than buyers of conventional cars,
according to JD Power. Utilities should take steps to educate and support EV dealers in
their territories to improve the customer experience and encourage market growth.
Electric Vehicles

11. © E Source
Prepay Programs
Utilities are starting to recognize the
potential benefits of offering customers
a prepay billing option. Two utilities,
SRP and APS, are actually claiming
savings from prepay, and other
programs are seeing savings from 5 to
14 percent. For our report “Claiming
Savings from Prepay Programs,” we
discussed the current state of prepay,
explored its savings potential, and
presented the two Arizona programs
as case studies. We also identified the
most-effective audiences for prepay,
including vacation home owners,
customers on daily or weekly budgets,
and those for whom a connection fee
or deposit is a major barrier.

12. For 30 years, E Source has been providing
market research, data, and consulting services
to more than 300 utilities and their partners.
This guidance helps our customers advance
their efficiency programs, enhance customer
relationships, and use energy more efficiently.
For more information, visit www.esource.com,
email esource@esource.com, or call
1-800-ESOURCE.
DSM-1700057-002