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Overview of Residential Pricing/Advanced Metering Pilots

Overview of Residential Pricing/Advanced Metering Pilots. Charles Goldman Lawrence Berkeley National Laboratory SMPPI Board Meeting August 3, 2005. Residential Pricing Pilots: Recent & Current Examples. California Statewide Pricing Pilot (SPP)

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Overview of Residential Pricing/Advanced Metering Pilots

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  1. Overview of Residential Pricing/Advanced Metering Pilots Charles Goldman Lawrence Berkeley National Laboratory SMPPI Board Meeting August 3, 2005

  2. Residential Pricing Pilots: Recent & Current Examples • California Statewide Pricing Pilot (SPP) • Puget Sound Energy’s Personal Energy Management program • Gulf Power Residential Service Variable Pricing (RSVP) • Community Energy Cooperative’s Energy Smart Pricing Plan • PSE&G Energy Information Control Network

  3. California: Statewide Pricing Pilot (SPP) • Three investor-owned utilities: PG&E, SCE, and SDG&E • Representative Sample of 2,500 residential and small commercial customers • Three primary treatment groups • Time-of of-Use (TOU) Use (TOU) • On-to-off-peak price ratio about 2:1 • Critical Peak Pricing-Fixed (CPP-F) • Critical Peak, Peak (2-7 pm weekdays) and off peak period • Critical Peak Prices much higher - 5:1 – on up to 15 days a year • Day-ahead notification by phone, fax, email, pager • Critical Peak Pricing-Variable (CPP-V) • Critical peak period varies from 1 to 5 hours from 2-7pm • These customers have smart thermostat programmed for automated response

  4. SPP Background / Design CA SPP: Objectives Estimate usage (kWh) and demand (kW) impacts from different time-differentiated rate forms. Estimate price elasticities and develop econometric models to examine the effects of weather, customer usage and a other customer characteristics. Estimate customer preference for dynamic and current rate forms.

  5. TOU Tariff- (high) CPP-V Tariff- (high) 75 Hours Per Year (Maximum) 70 $0.73 60 50 40 Cents per kWh 30 $0.26 $0.23 1500 Hours Per Year Existing Avg. Summer Price 13.4 ¢/kWh 1,425 Hours Per Year 20 10 $0.089 7,260 Hours/ year $0.10 7,260 Hours / Year 0 2:00-7:00pm Weekdays Other Weekday & Weekend hours Dispatched Varies 2:00-7:00pm 2:00-7:00pm Weekdays Other Weekday & Weekend hours Off-Peak Peak Peak Off-Peak Critical Peak SPP Background / Design SPP Residential Rates: TOU & CPP

  6. Price Elasticity's – Load Impacts CPP-F Customers: Percent Change In Peak Period Energy Use 5 1.0 0 -5 % Change In kWh - 8.2 -10 - 8.4 - 9.6 - 10.9 -12.0 -11.0 -12.5 -13.4 -15 -14.4 -16.0 -16.0 -16.3 -17.1 -17.2 -20 Statewide Average Climate Zone Zone 1 Coastal Zone 2 Inland Zone 3 Inland Hot Zone 4 Desert Hottest CRA Econometric Model 2003 CEC Engineering Method CRA Econometric Model 2004 Source: R. Levy

  7. 20 19.2% YES 17.2% 18 200% Average Use 15.1% 16 > $100,000 13.5% 14 12.8% 12.5% 12.3% Single Family 12.1% 12.1% YES NO 12 NO < $40,000 9.8% Percent Reduction 9.79% 10 50% Average Use Multi-family 8 6 4 2 0 Central AC Ownership Pool Ownership State-wide Average High vs. Low User Income Single vs. Multi-Family Price Elasticity's – Load Impacts Residential 2003 CPP Response by Attribute Percent Reduction in Peak Period Usage Source: R. Levy and Statewide Pricing Pilot, Summer 2003 Impact Analysis, CRA, August 9, 2004, Table 5-9, p.90

  8. Customer Bill Impacts CA SPP: Residential Customers – Utility Bill Impacts 2003 2004 Customers With Bill Savings Customers With Bill Increases CPPF-A Statewide Representative Sample CPPF-B Residential Low Income, SF Hunters Point Source: Statewide Pricing Pilot, Shadow Bill Results, WG3 report, June 9, 2004 and Joint Utility Bill Analysis, January 12, 2004.

  9. Puget Sound Energy:Personal Energy Management Program • First and largest residential RTP effort • Advanced meters (leased) for all gas and electric customers • 300,000 electric customers on TOU rates • Narrow price differential (see figure)

  10. Year 1 Implemented amidst the West Coast Energy Crisis of 2000-2001 Very positive initial customer response 5-6% peak reduction 5% conservation savings Crisis begins to abate Year 2-3 Stakeholders begin questioning Rate differential is narrowed Puget sends out customer reports Media fans the flames Puget pulls program A collaborative process around residential time-differentiated pricing continues Puget Sound Energy: Results

  11. Gulf Power’s Residential Service Variable Pricing (RSVP) • Standard Residential Customer Charge applies: $8.07 per month • RSVP Participation Charge: $4.53 per month • Prices per kWh (includes energy charge, fuel, various adders) • Low 3.5 cents/kWh • Medium 4.6 cents/kWh • High 9.3 cents/kWh • Critical 29.0/kWh • Standard Residential Rate: 5.7 cents/ kWh

  12. RSVP Program Results • CPP rate plus TOU – 5:1 differential • 6000 customers paying $14.95/month • Summer Peak Reduction - 40% • Annual energy savings – 1400 kWh • Average annual bill savings – 15% • High customer satisfaction

  13. Community Energy Cooperative: Energy Smart Pricing Plan • Started in January 2003 as a pilot project with Commonwealth Edison • Day-ahead hourly prices posted on web page: first residential RTP tariff • Prices capped at 50 cents/kWh • Utility installed interval meters to record hourly energy use • Participants notified of high price days via phone or email • Extensive customer outreach & education on managing energy use patterns

  14. Energy Smart Pricing Plan: Results • 1500 participants (June 2005) from ethnically diverse urban & suburban Chicago • Evaluation found that: • Participants respond to peak period prices (in summer 2003) but not much in 2004 • Participants saved money: • Although Participants of all incomes benefited, low-income households responded more to high prices • Pattern of increased investments in energy efficiency noted

  15. PSE&G’s Energy Information Control Network (EICN) • Overview • Experimental real-time pricing and TOU tariffs plus enabling and display technology and load control offered to 2,000 residential and commercial customers • Objective: Test capabilities and customer acceptance of smart metering devices paired with price signals and two-way communications • Cost: $4.4 million • Duration: 18 months

  16. PSE&G EICN Experimental Design • Control group: • “Blind” customer group receives interval meter but remains on flat rate • TOU/CPP Education: • Customers receive TOU + CPP, along with education materials & day-ahead CP notification • TOU/CPP Technology: • Customers receive TOU + CPP + education materials + visual display and energy management technology • Day-ahead RTP Technology: • Customers receive day-ahead hourly prices + educational materials + virtual display and energy management technology • Load Management: • Direct control switches activated by the utility w/ 2-way communications

  17. EICN Scope and Budget

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