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What Works
in DR Program Design
NPCC Demand Response Workshop
February 24, 2006
Contents
1.
2.
PGE DR Capability
What Works
1. Level of Control
2. Customization vs. Mass Market design
3. Marketing & Education
3.
RD&D for the Future of DR
2
Portland General’s Demand Response Capability
Load Control
Large Customers
 Dispatchable Standby Generation - ~30 MW online, 10 MW under construction.
 Custom peak load curtailment contracts available for large customers.
Residential and Small Non-Residential Customers
 Experience with direct control of space heat and water heat.
Pricing
Large Customers
 Demand Exchange (DBB) for large customers - 30 MW enrolled, ~4 MW likely.
 Large customer programs supported by Energy Information Services (EIS) - ~500 bills.
 RTP pilot available for large customers.
Residential and Small Non-Residential Customers
 TOU for residential and small non-residential - ~1,800 customers.
Active Demonstration Projects

Fuel cells, microturbines, and combined heat & power (CHP).
Justification for implementation measured against total resource cost effectiveness, reliability, dispatchability, avoided
supply side capacity costs, and environmental impact.
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1 - Degree of Utility Control
Win-Win
Dispatchable Standby Generation
 Number of controllable hours is specified contractually.
 It doesn’t interfere with customers’ schedule.
 Power marketers have put DSG on reserve frequently in last 6 months.
So-So
Demand Exchange (DBB)
 The range is broad, and is not firm resource.
 Reduction is based not only on price, but on the customers’ priorities at
the time.
Direct control of water heat.
 Customers reported they liked it.
 Timing of when water heater on may not coincide with system need.
Who Knows
Direct control of space heat.
 Not comparable to AC results; heat tolerances are narrower.
 First hour of reduction is more reliable than subsequent hours, due to
overrides.
TOU for residential and small non-residential
 Takes 1-2 years of history and data collection to determine amount of
likely shift.
 Need large volume to realize large reductions.
 Results vary with pricing.
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I’m not going to have anyone
telling me how to use electricity –
l have to use it when I need it in
order to keep my business
running.
It’s so convenient
for me to not
have to worry
about when my
water heater is
on or not. I’m
sure I’m saving
energy and
money!
What Works –
Degree of Utility Control
High Degree of Utility Control works WHEN:
 It doesn’t interfere with customers’ schedule, AND
 Number of controllable hours is specified contractually.
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2 - Customer-by-Customer Negotiations and
Mass Market Implementation

Customary Approach - Pragmatic
 Large customers require a customized
approach.


Opened RFP for customized mandatory
contract. Responding customers negotiated
one-by-one.
Even with “mass market” approach, via rate
design or tariffs, large customers tend to work
one-on-one with the utility, e.g., DBB needs
baseline per account.
 Mass Market design is most cost effective
with small and residential customers.

Need to show the benefit to varying customer
groups, e.g. spectators/converts/teammates,
purchase classifications such as country
traditionals/young moderns, business SICs.
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What Works –
One-on-One vs. Mass Market Design
Higher Customer Interest WHEN:
 It doesn’t interfere with customers’ schedule, AND
 Customers see an economic benefit.
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3 - Marketing/Education – SDG&E

Non-Participants offer the best insight
 SDG&E learned customers shy away from
programs that:





Are not a mainstream concept
Are complex and technical
They believe will result in higher bills
Don’t have an advantage for the customer
Improved their response rate when:
 Simplified the materials
 Mailed direct mail, twice
 Telephone follow up
 Targeted likely customer group
 4,000 letters, mailed twice = 744 responses
Information from SPP CPP-V Track A
Redeployment, JC Martin, June 9, 2004
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3 - Marketing/Education



“Get a new digital thermostat
like this one installed in your
home for free…
SDG&E used a brief letter and simple
brochure in recruiting for their residential
thermostat program.
They highlighted that customers receive
a free thermostat, a $100 value in
addition to cash incentives.
They also recruit new customers where
technology has already been installed:
“Dear Customer:
“Did you know that the
thermostat in your home can
earn you up to $100 this
year. Your home is equipped
with a state of the art,
programmable `smart
thermostat’….”
And earn some cash back
too!”
Information courtesy of Lela Manning, SDG&E.
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3 - Marketing/Education - LIPA

1.
2.
3.
LIPA is aggressive in recruiting and
retaining customers in contracted C&I
program and residential load control.
Community
Compensation
Communication
1.
Community - Appealed to the sense of helping the sense of
economic development for the community, alliance with
McDonald’s through the school program. Contests and Prizes.
2.
Compensation – Always provided a monetary incentive;
absence of penalties helps. Customers’ business or lifestyle
come first. Power Perks Loyalty Card for discount shopping.
Tickets to Islanders’ hockey games.
3.
Communication – Requires multiple means, e.g. brochures,
direct mail, community events, school pizza parties, a mascot,
pre-curtailment notification, post-curtailment follow up, status
of impact made by customers/communities (helps with
retention).
Information courtesy Bill Jackson, April 2005.
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3 - Marketing/Education – City of Anaheim

City of Anaheim rewards customers with a
high value credit for energy not used during
peak hours.


A “rebate driven DR program”
Education/Information/Incentive and
Technology

Technology is a “key enabler in success of DR
programs”.

Recruitment through Direct Mail = 150

Fact sheets, refrigerator magnet

Reports sent to participants after each
event

Positive Incentive, not a pricing program, no
rate reduction, no penalties

$0.35/kWh rebate at end of season

Measured against control baseline

Regular rate is $0.11/kWh
Information from Linda LeDuc presentation
September 2005.
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What Works –
Marketing/Education
Higher Customer Interest WHEN messaging includes:

It doesn’t interfere with customers’ schedule, AND

Customers see an economic benefit.
Tactics:

Brief letters

Clear Direct Mail brochures

Telephone follow up

Free technology

Monetary benefit

Appeal to community benefit

No penalties

Visual reminders – mascots and magnets

Follow up reports help retention
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Vision for the End State
PGE’s Vision is for Market Transformation:

DR and other Distributed Generation will reach critical mass.

Smart Homes and Smart Businesses, with smart appliances, will
become common.
 Appliance manufacturers will find ways to build intelligence into their
production line appliances or it will be driven by standards.
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