What Customers Want (from Demand Response)


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Presentation by Vikki Wood, Project Manager, Sacramento Municipal Utility District. This presentation was part of a panel that was moderated by Christine Hertzog, Managing Director of Smart Grid Library, at our 4th Annual Fujitsu Laboratories of America Technology Symposium held in Sunnyvale on June 9th, 2010. The theme of the event was:

Smart Grid: When Energy Meets the "Internet of Things"

And the panel was titled:

"Building Consumer Buy-In for Smart Homes in the Smart Grid"

Photos of the event can be found here, along with links to other details about our event:


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What Customers Want (from Demand Response)

  1. 1. What Customers Want (from Demand Response) Vikki Wood Energy Research & Development Sacramento Municipal Utility District Fujitsu Labs of America Technology Symposium June 9, 2010
  2. 2. What is Demand Response? <ul><li>Price-Based: Customers are charged by time of electricity use and reduce bills by adjusting the timing of their usage </li></ul><ul><ul><li>Real-Time Pricing (RTP) </li></ul></ul><ul><ul><li>Critical Peak Pricing (CPP) </li></ul></ul><ul><ul><li>Time-of-Use Pricing (TOU) </li></ul></ul><ul><li>Incentive-Based: Customers allow the utility to reduce electricity load at critical times in return for an incentive </li></ul><ul><ul><li>Direct Load Control (DLC) </li></ul></ul><ul><ul><li>Interruptible/Curtailable Service </li></ul></ul><ul><ul><li>Emergency DR Programs </li></ul></ul><ul><ul><li>Capacity Market Programs </li></ul></ul><ul><ul><li>Demand Bidding/Buyback Programs </li></ul></ul>
  3. 3. Why DR at SMUD? <ul><li>SMUD needs DR </li></ul><ul><li>DR works </li></ul><ul><li>Customers like DR </li></ul><ul><li>DR technology connects SMUD to customers and vice-versa </li></ul>
  4. 4. SMUD Needs DR: Capacity <ul><li>Highest 40 hours responsible for 400 MW </li></ul><ul><li>System load projected to grow by 10% to 15% over next 10 years </li></ul><ul><li>Resource gap projected in 2012 and beyond due to expiring bilateral and renewable contracts and growth </li></ul>Critical peak: 400 MW for 40 hours/year
  5. 5. SMUD Needs DR: Strategic Value <ul><li>Use as emergency, non-spinning reserves </li></ul><ul><li>Act as reserves against the uncertainty of the growing portfolio of intermittent renewable energy generation </li></ul><ul><li>Defer or displace conventional generation, transmission or distribution capacity expansion </li></ul><ul><ul><li>Requires long-term commitment to DR programs for reliability (“right certainty” criterion) </li></ul></ul><ul><ul><li>For distribution system displacement requires knowledge of exact location of DR participants and their associated load reductions (“right location” criterion) </li></ul></ul>
  6. 6. DR Works : 2002 PowerStat Pilot (AC Direct Load Control w/T-Stat) <ul><li>Unit kW savings almost double for PowerStat </li></ul><ul><ul><li>Difference in technologies – Two way communication allows for identification of non-operational controllers and AC units </li></ul></ul><ul><ul><li>Difference in populations – PowerStat more engaged in program </li></ul></ul><ul><ul><li>Difference in estimating methodologies </li></ul></ul>
  7. 7. DR Works : 2003 Power Choice Pilot (CPP w/T-Stat) <ul><li>Positive relationship between savings and: </li></ul><ul><ul><li>Satisfaction and willingness to continue program </li></ul></ul><ul><ul><li>Checking for a critical event or usage data </li></ul></ul><ul><ul><li>Investment in energy efficiency </li></ul></ul><ul><ul><li>Education level </li></ul></ul><ul><ul><li>Presence of children and seniors </li></ul></ul><ul><li>Negative relationship between savings and: </li></ul><ul><ul><li>Being home during peak </li></ul></ul><ul><ul><li>Adjusting AC temperature during critical peak </li></ul></ul><ul><ul><li>Changing critical period setback temperatures </li></ul></ul><ul><ul><li>Dollar benefit due purely to rate change </li></ul></ul><ul><li>No relationship between savings and: </li></ul><ul><ul><li>Knowledge of price schedules or times of use </li></ul></ul><ul><ul><li>Participation in billing programs </li></ul></ul><ul><ul><li>Dwelling characteristics </li></ul></ul><ul><ul><li>Water heat and pool pump control </li></ul></ul><ul><li>Load: </li></ul><ul><ul><li>in the low price period increased by 1% </li></ul></ul><ul><ul><li>in the medium price period declined by 8% </li></ul></ul><ul><ul><li>in the high price period declined by 11% </li></ul></ul><ul><ul><li>during critical price period declined by 16% </li></ul></ul><ul><ul><li>across the summer declined by 4% </li></ul></ul>
  8. 8. <ul><li>Residential rates reduced peak period (2 pm to 7 pm) demand on critical peak pricing days—greater reductions in inland hot climate zones, greatest in desert climate zones </li></ul><ul><ul><li>TOU rate on average CPP day: 4.1% </li></ul></ul><ul><ul><li>CPP fixed rate on average CPP day: 12.5% </li></ul></ul><ul><ul><li>CPP variable rate with automated controls on average CPP day: 34.5% </li></ul></ul><ul><ul><li>CPP variable rate with automated controls on hottest CPP day: 47.4% </li></ul></ul><ul><li>71% of residential customers saved an average 5% on their bill , while 29% paid 4% more </li></ul><ul><li>Small commercial customers (<20kW) reduced peak period demand on CPP days between 6% to 9% </li></ul><ul><li>Medium commercial customers (>20kW but < 200kW) reduce peak period demand on CPP days between 8% to 10% </li></ul><ul><li>Observed peak load impacts persist across multiple consecutive CPP days and across two years of the experiment </li></ul>DR Works: 2003-04 Statewide Pricing Pilot
  9. 9. DR Works: 2007-08 Small Commercial Summer Solutions Pilot (T-Stat) Business Type Program Option Energy Savings Peak Demand Savings Office 4⁰ ACC -27% -38% CPP -32% -24% Retail 4⁰ ACC -15% -22% CPP -19% -14% Restaurant 4⁰ ACC -8% -1% CPP -10% -3% Combined -23% -20%
  10. 10. Customers Like DR: 30+ Years of Peak Corps (AC Cycling) <ul><li>From 1990-1998 Peak Corps used an average of 8 times per summer </li></ul><ul><li>Peak Corps participants and non-participants equally satisfied with SMUD; 97% of participants satisfied with Peak Corps </li></ul><ul><li>Satisfaction directly related to cycling intensity ( higher intensity = higher satisfaction ) </li></ul><ul><li>When questioned directly, participants say the incentive is the most important attribute </li></ul><ul><li>When forced to make trade-offs among attributes, cycling intensity (comfort level) is actually most important </li></ul>
  11. 11. Customers Like DR : Peak Corps Growth 1990-2000 <ul><li>Two-thirds of participants remain on original cycling option </li></ul><ul><ul><li>18% increase cycling option </li></ul></ul><ul><ul><li>4% decrease cycling option </li></ul></ul><ul><ul><li>11% drop </li></ul></ul><ul><li>Opt-out customers comprised 79% of new growth </li></ul><ul><li>Attrition greater by 15%-20% for opt-outs than opt-ins, regardless of how long customers participate </li></ul><ul><li>Opt-In = All media solicitations </li></ul><ul><li>Opt-Out = </li></ul><ul><ul><li>Low-income and AC rebate program participants </li></ul></ul><ul><ul><li>New home dwellers </li></ul></ul><ul><ul><li>New occupants in homes with existing cyclers </li></ul></ul>
  12. 12. <ul><li>Two-thirds of participants elected to stay in PowerStat program at the end of pilot </li></ul><ul><li>71% satisfied with the PowerStat program, 10% dissatisfied </li></ul><ul><li>71% satisfied with the PowerStat thermostat, 19% dissatisfied </li></ul><ul><ul><li>44% had trouble with programming or operating the thermostat </li></ul></ul><ul><li>62% would prefer an increase in set point of thermostat vs. cycling the AC </li></ul>Customers Like DR: 2002 PowerStat (Peak Corps w/T-Stat)
  13. 13. Customers Like DR : 2003 Power Choice Pilot (TOU/CPP w/T-Stat) <ul><li>80% of participants satisfied with program, 11% dissatisfied with program </li></ul><ul><li>69% of participants satisfied with thermostat, 14% dissatisfied with thermostat </li></ul><ul><li>During non-critical peak periods 79% were as or more comfortable than before the program </li></ul><ul><li>During critical peak periods, 53% were somewhat to very uncomfortable </li></ul><ul><li>Customers who saved the most were most aware of their behaviors and vice-versa </li></ul>
  14. 14. Customers Like DR : 2003-2004 IOU Statewide Pricing Pilot (TOU/CPP) <ul><li>80% of residential customers prefer time-based rates </li></ul><ul><li>70% of commercial customers prefer time-based rates </li></ul><ul><li>90% feel dynamic rates should be offered </li></ul><ul><li>64% feel a dynamic rate should be the default </li></ul><ul><li>Participants use energy management strategies to reduce electricity use for more than high use time periods, resulting in long term energy efficiency/conservation </li></ul><ul><li>The vast majority of participants respond to critical peak periods by reducing or shifting for the entire duration of the event. Very few choose not to respond to critical peak events </li></ul><ul><li>70% of pilot participants have chosen to remain on their CPP rate </li></ul>
  15. 15. <ul><li>70% satisfied with Power Choice rate, 14% dissatisfied </li></ul><ul><li>74% of Power Cost Monitors are still working </li></ul><ul><li>78% (of those with working Monitors) found monitor useful ― all would keep it </li></ul><ul><li>The Monitor prompted behavioral changes for 78% of households , prompted discussion about energy in 67% </li></ul><ul><li>78% check the Monitor at least daily , checking behavior dropped a little over time </li></ul>Customers Like DR: 2006 Power Choice TOU (w/Power Monitor)
  16. 16. Customers Like DR : 2006 Pricing Focus Group Findings <ul><li>Behavior: Most participants are receptive to reducing energy usage overall and on peak </li></ul><ul><li>Technology: While willing to reduce peak energy usage, they also want to retain control ―generally prefer temperature setback to utility direct load control </li></ul><ul><li>Price: Participants’ responses to pricing concepts depend heavily on the perceived impact to their individual bill and business or lifestyle. Want SMUD to keep pricing easy to understand </li></ul><ul><li>Community: Participants want to know that all customers will be asked to do their part and what SMUD is doing to be energy efficient and green </li></ul><ul><li>Education: Want education from SMUD on what energy-saving steps would make a difference </li></ul><ul><li>Future: Participants expressed their concern about the environment and the future </li></ul>
  17. 17. Customers Like DR : 2008 Small Commercial Summer Solutions Pilot (TOU/CPP) <ul><li>80% satisfied with Summer Solutions rate, would participate again without any incentive , 20% dissatisfied </li></ul><ul><li>Offices and retail were more likely to sign up for the program than restaurants </li></ul><ul><li>The pilot significantly increased the use of pre-cooling as a comfort strategy </li></ul><ul><li>Participants dropped load during event hours without increasing overall usage </li></ul><ul><li>5% of CPP participants and 3% of DLC participants overrode the event settings during events </li></ul>
  18. 18. Customers Like DR: 2009 Residential Summer Solutions Pilot Focus Groups (TOU/CPP) <ul><li>Liked technologies, but stressed that must be easy to use and the information must be easy to understand </li></ul><ul><ul><ul><li>Appliance level information preferred </li></ul></ul></ul><ul><ul><ul><li>Preferred thermostat reset to compressor control, but worried about “big brother” </li></ul></ul></ul><ul><ul><ul><li>Combined TOU/CPP rate preferred to TOU only or CPP only </li></ul></ul></ul><ul><ul><ul><ul><ul><li>“ CPP only rate doesn’t encourage long-term conservation—won’t be permanent.” </li></ul></ul></ul></ul></ul><ul><li>Saw value in control technologies as a tool to respond to critical events…however, concerned about SMUD controlling appliances </li></ul><ul><li>Made clear that customers should have choices and SMUD should help customers decide options that would be best for them </li></ul><ul><li>Very concerned about security of meter data </li></ul><ul><ul><li>“ I can tell if my bank account has been compromised ...I know what to do and I’m protected from losses. If my energy data is hacked, how would I know and how would that affect me?” </li></ul></ul>
  19. 19. DR Technology Connects SMUD to Customers: Integrating DR & EE <ul><li>Demand Response programs generally do not encourage Energy Efficiency savings </li></ul><ul><li>Current valuation method for DR favors utility </li></ul><ul><li>New technologies enable both DR & EE </li></ul><ul><li>Integrating DR & EE in program will </li></ul><ul><ul><li>Provide greater bill savings to customers , thus improving value to customer </li></ul></ul><ul><ul><li>Increase EE savings overall </li></ul></ul>
  20. 20. DR Technology Connects SMUD to Customers: Integrating DR & EE in Summer Solutions <ul><li>DR benefits utility, EE benefits customer </li></ul>Program Option Monthly Energy Bill Savings Monthly Peak Demand Bill Savings Monthly Total Bill Savings 4⁰ ACC $29 $10 $39 TOU/CPP $39 $7 $46 Combined $36 $8 $43
  21. 21. DR Technology Connects SMUD to Customers: Information and Control <ul><li>Customers want: </li></ul><ul><ul><li>To feel their participation in DR programs is valuable to SMUD </li></ul></ul><ul><ul><li>To know how much energy they are using, with what appliances and when </li></ul></ul><ul><ul><li>Ways to manage energy use </li></ul></ul><ul><ul><li>Technology that gives them both information and control </li></ul></ul><ul><ul><li>Rates that allow them to save money—willing to put up with a little discomfort and inconvenience for savings </li></ul></ul><ul><ul><li>Rates that are easy to understand, technologies that are easy to use </li></ul></ul><ul><ul><li>Choices about form factor of technologies, rates and programs </li></ul></ul><ul><ul><li>To know their personal data is secure </li></ul></ul>
  22. 22. DR Technology Connects SMUD to Customers: Smart Grid Relationship <ul><li>Customers can: </li></ul><ul><ul><li>See energy use by appliance and total </li></ul></ul><ul><ul><li>See energy use by period (real time, hour, day, week, month, year) and compare across time or with others </li></ul></ul><ul><ul><li>Choose display (t-stat, tablet, Internet, phone, TV) </li></ul></ul><ul><ul><li>Set schedules for appliance use (including pre-cooling) </li></ul></ul><ul><ul><li>Choose how to receive alerts for critical events </li></ul></ul><ul><ul><li>Know when appliances need repair or replacement </li></ul></ul><ul><ul><li>Receive customized appliance/efficiency measure payback information and recommendations for actions </li></ul></ul>
  23. 23. Questions ? <ul><li>Contact: </li></ul><ul><li>Vikki Wood </li></ul><ul><li>[email_address] </li></ul><ul><li>916-732-6278 </li></ul>