BGEs Smart Energy Pricing The National Town Meeting on Demand Response and Smart Grid

1
BGEs Smart Energy Pricing The National Town
Meeting on Demand Response and Smart Grid
Cheryl Hindes Director -- Load Analysis and
Settlement July 14, 2009
2
BGEs 2008 Smart Energy Pricing (SEP) Pilot
featured Peak Time Rebate and Critical Peak
Pricing

• Pilot of 1,375 residential customers in Summer
  2008 1,021 participants, 354 control group
• Pilot included Dynamic Peak Pricing (DPP or CPP)
  and Peak Time Rebate (PTR)
• Customers were given day ahead notification of
  critical peak event by their choice of methods
• E-mail, telephone call, text message (up to 5 of
  each)
• Certain had the Ambient Energy Orb, signaling
  prices by color code and pulsing light
• Sample of customers had enabling technology (ET
  smart A/C switch)
• Very favorable customer satisfaction results
  confirm customers interest
• Key findings of impact assessment conducted by
  The Brattle Group
• Price elasticities for DPP and PTR were not
  statistically different
• On average customers save
• 22 37 at peak conditions (PJM definition
  hour ending 1700 with WTHI of 83.1)
• 18 33 during 50 critical hours

3
Dynamic Peak Pricing Weekdays (excluding
Holidays)
1.30
Pilot Pricing All in Rate Critical
1.30425 Peak 0.14425 Off-Peak
0.09425 Includes generation, transmission and
delivery
0.14
0.09
4
Peak Time Rebate Weekdays (excluding Holidays)

• A Mirror Image of the DPP Rate
• Schedule R summer rates are 0.14 / kWh for all
  summer hours
• Up to 12 critical peak days will be called by 6
  p.m. the prior day
• Customers who use less during the critical period
  (2 7 p.m.) on any critical peak day will
  receive a rebate. Two levels being tested
• 1.75/kWh
• 1.16/kWh

5
Smart Energy Pricing Pilot Design
BGEs SEP Pilot 1,300 accounts, a statistically
significant sample
6
Summer 2008 PilotSmart Energy Pricing - Peak
Demand Reductions
DPP Tariff
No Tech
Orb Switch
Orb Switch
Orb Switch
No Tech
No Tech
Orb Only
Orb Only
Orb Switch
Orb Only
No Tech
Orb Switch
Low Rebate1.16 / kWh
High Rebate1.75 / kWh
Peak demand reductions are defined for HE 1700
for THI of 83.1 degrees
7
Summer 2008 Pilot Average Energy Savings over
Critical Events
DPP Tariff
No Tech
Orb Switch
Orb Switch
Orb Switch
No Tech
No Tech
Orb Only
Orb Only
Low Rebate1.16 / kWh
High Rebate1.75 / kWh
Critical events are the first 10 (of 12)
called events during 2008 pilot from HE1500 to
HE1900
8
Customers Were Satisfied with Smart Energy
Pricing!
On a scale of 1 to 5, where 1 is "Very
Dissatisfied" and 5 is "Very Satisfied", please
rate your overall satisfaction with the pilot
program. (77 response rate)
9
Customers Think Smart Energy Pricing Should be
the Standard
During your pilot participation, you experienced
a variable rate program where energy used during
critical peak periods cost more than energy use
during other times. Customers saved money by
using energy during non-critical peak periods. Do
you think this pricing format should be standard
for all BGE customers? (Select one option)
10
PTR More Favorable than DPP, Overall 93
Satisfied
On a scale of 1 to 5, where 1 is "Very
Dissatisfied" and 5 is "Very Satisfied", please
rate your overall satisfaction with the pilot
program. (77 response rate)
11
Peak Time Rebate Widely Favored

• BGE held 6 focus groups in 2007 focused on CPP
• Our customers said they need help in
  understanding their usage and how they could save
  
• Our customers said CPP could not be a default
  rate
• More customers were very satisfied with PTR (66)
  than with CPP (48)
• MD PSC and Office of Peoples Counsel questioned
  the appropriateness of CPP as default and favored
  PTR instead
• Most (81) PTR participants think PTR should be
  standard (default) pricing

12

• Appendix

13
Summer 2008 Pilot Summary of The Brattle Group
Analysis
14
June 2008
Despite Unseasonably Mild Weather, BGE called 12
Smart Energy Pricing Events in 2008

July 2008
High Temp
96
92
92
90
92
89
91
September 2008
August 2008
92
92
92
73
72
14
15
Smart Energy Pricing Continues in 2009

• Small commercial customers added
• Assessing the level of savings as compared to the
  Summer of 2008 for returning residential customer
• Added Smart Thermostats (in addition to Smart
  Switches)
• Added Twitter
• Tips, notifications, reminders, way to go!
• Posted 20 Tweets in June
• Simulating PJM Emergency Events
• Notification 30 60 minutes prior to event

16
BGE Service Territory
17
BGEs Business at a Glance

• Electric TD
• delivers through 2,300 square miles of territory
• circuit miles
• 21,819 of distribution(lt 34.5 kV)
• 1,297 of transmission( gt 115 kV)
• Gas Distribution
• stores and delivers gas
• two peak shaving plants
• nine gate stations
• 5,870 miles of gas main