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MEC: Customer Profitability Models Topic DSM – DR, Advanced EE and Dispatch Ability

MEC: Customer Profitability Models Topic DSM – DR, Advanced EE and Dispatch Ability. Jesse Langston, OG&E Oct 20 th 2013. Situation. MEC Questions. Current State Current EE programs focus on customer savings and cost recovery, but not earnings

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MEC: Customer Profitability Models Topic DSM – DR, Advanced EE and Dispatch Ability

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  1. MEC: Customer Profitability ModelsTopicDSM – DR, Advanced EE and Dispatch Ability Jesse Langston, OG&E Oct 20th 2013

  2. Situation MEC Questions Current State • Current EE programs focus on customer savings and cost recovery, but not earnings • Metrics for Regulatory commissions focuses on energy reductions rather than demand reductions • Utilities investing in a significant level of technology but may not be taking full advantage • Smart Meters / Dumb Rates • Smarter demand side options How can we build profitable model business models in this dynamic environment? How do we balance the needs for cost recovery and also innovate?

  3. OG&E Shifting Emphasis from EE to DR Programs • Serves 800,000 customers in Oklahoma and Arkansas. • Demand Response • 80,000 Customer • Dynamic Pricing • No Direct Load Control • Smart Grid Integrated • Energy Efficiency Programs • Lost Revenue & Incentives • Other • RTP, GFB, Wind and Rate tamer

  4. DR overall value to customer is high and behavior is predictable (Future dispatchable program?) 2012 and 2013 OG&E Smart-hours program results

  5. When given the option, 73% of customers would choose according to their personal preferences vs. standard tariffs 2013 OG&E conjoint study

  6. MEC Question: How can we build profitable model business models in this dynamic environment? ROI & Risk Today Tomorrow Next Gen

  7. OG&E Product and Service Evolution Implemented programs Programs under development ROI & Risk Smart Grid as a Utility Service Community Renewable with Price Guarantee Smart Grid Integrated LED Lighting Smarthours Thermostat Price Response Guaranteed Flat Bill Commercial Standard Offer Solar PV installation Smart Grid Integrated LED Lighting Integrated Volt Var Control Home Energy Efficiency High Efficiency Lighting Yesterday Today Tomorrow

  8. MEC Question: How do we balance the needs for cost recovery and also innovate?

  9. The “Secret Sauce” is having a product plan continuum that meets broad customer needs * Smart Grid Enhanced

  10. Keys for success • Ability to effectively market and offer strong customer value • Requires effective regulatory strategy • Ability to evolve as technology improves • Flexibility to improve business models and market approach

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