cpuc workshop on best practices & lessons learned in time variant pricing tvp load & bill...
TRANSCRIPT
CPUC Workshop on Best Practices & Lessons Learned in Time Variant
Pricing
TVP Load & Bill Impacts, Role of Technology & Operational Consideration
Dr. Stephen George
Senior Vice PresidentNexant
June 17, 2014
SMUD’s SmartPricing Options Pilot Has Produced Very Useful Insights Regarding TVP
Residential
Opt In
TOU
No IHD Offer(1,229)
With IHD Offer
(2,199)
CPP
With IHD Offer
(1,651)
No IHD Offer(223)
Default
TOUWith IHD
Offer(2,018)
TOU-CPPWith IHD
Offer(588)
CPPWith IHD
Offer(701)
Three Rate Options
Two Recruitment Strategies
Impact of IHDs on Customer Acceptance
Total enrollment including deferred groups = 12,027; Total # of customers receiving offers (including deferred groups) = 53,798; Total # of customers in SPO including controls = 99,661
2
Prices for the Three SPO Pricing Plans
Standard TOU CPP TOU-CPP$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.10$0.08 $0.09 $0.07
$0.18$0.17 $0.17
$0.14
$0.27 $0.27
$0.75 $0.75
Off-Peak Base Off-Peak Base Plus On-Peak Critical Peak
Pri
ce
pe
r k
Wh
($
)
n/an/a
On-peak from 4 to 7 PM on all non-holiday weekdays from June
through September (~10% of all summer hours)
Critical peak from 4 to 7 PM on up to 12 event days between June
& September (~1% of all summer hours)
n/a n/a
3
4
Roughly 4 decades of research says yes to peak demand reductions In the SPO, average load reductions per participant were significant for all
pricing plans CPP impacts were roughly twice as large as TOU impacts on a percentage
basis Opt-in average impacts were roughly twice as large as default average
impacts
Energy savings impacts are generally small or non-existent In the SPO, 3 out of 8 pricing plans showed statistically significant savings in
the 1% to 3% range
The snapback effect in the SPO was typically not statistically significant and in one case showed that load reductions continued beyond the peak period
Have TVP Rates Led to Reduced Peak Demand and Energy Savings?
Average Load Impacts Across the Two SPO Summers Were Significant for Both Opt-in & Default TOU Pricing Plans
Opt-in TOU, No IHD Offer
Opt-in TOU, IHD Offer Default TOU, IHD Offer Default TOU-CPP, IHD Offer
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
9.4%
11.9%
5.8%
8.7%
Average Weekday Reductions for TOU Pricing Plans
Pe
rce
nt
Re
du
cti
on
in E
lec
tric
ity
Us
e B
etw
ee
n 4
an
d 7
PM
0.16 kW
0.21 kW
0.11 kW
0.17 kW
5
5
Average Load Impacts Across the Two SPO Summers Were Higher for CPP Than for TOU plans
Opt-in CPP, No IHD Offer
Opt-in CPP, IHD Offer Default CPP, IHD Offer Default TOU-CPP, IHD Offer
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
20.9%
25.1%
14.0%12.3%
Average Load Impacts on Event Days for CPP Pricing Plans
Pe
rce
nt
Re
du
cti
on
in E
lec
tric
ity
Us
e B
etw
ee
n 4
an
d 7
PM
0.49 kW
0.64 kW
0.36 kW0.31 kW
6
6
Is There Empirical Evidence Showing Whether Opt-in or Default TVP Produces Larger Aggregate Load Reductions?
CPP TOU TOU-CPP0
10
20
30
40
50
60
70
80
90
100 95.9 97.692.9
23.7 25.3 27
1821.3 19.4
5.7 47.7
Acceptance Rate Total Attrition Move Rate Drop Out Rate
Pe
rce
nt
Although average impacts in the SPO were smaller for default customers compared with opt-in customers, enrollment rates were much larger
Default Pricing Plans
7
Enrollment Rates for Opt-in Pricing Plans in the SPO Were Roughly 1/5th as High as for Default Pricing Plans
CPP, No IHD CPP, IHD Offer TOU, No IHD TOU, IHD Offer0
5
10
15
20
25
30
35
40
45
50
18.8 18.216.4 17.5
31.7
26.3 26.7 26.6
22.419
20.8 21.4
9.37.3
5.9 5.2
Opt-in Pricing Plans
Acceptance Rate Total Attrition Move Rate Drop Out Rate
Pe
rce
nt
8
8
When Average Impacts and Enrollment Rates Are Combined, Default Enrollment Produces Aggregate Load Impacts 3 Times Larger than Opt-in Enrollment
CPP Average Event Day TOU Average Weekday TOU Average Event Day0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
11.6
3.75.6
34.5
10.8
14.8
Opt-in Default
MW
Re
du
cti
on
Be
twe
en
4 a
nd
7 P
M
9
Aggregate Load Reductions Assuming SPO Enrollment and Load Impacts for Pricing Plans Offered to 100,000 Customers
9
Is There Data Showing How Different Customer Groups Perform on TVP Rates?
Default TOU, IHD Offer Default TOU-CPP, IHD Offer0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
5.4%
8.1%
5.5%
8.3%
Default TOU Pricing Plans
EAPR Non-EAPR
Pe
rce
nt
Re
du
cti
on
in E
lec
tric
ity
Us
e B
etw
ee
n 4
an
d 7
PM
0.09 kW 0.11 kW
0.15 kW 0.17 kW
10
For default TOU plans in the SPO, EAPR and non-EAPR customers were equally responsive, but absolute impacts differed because of usage differences
10
11
Across the two summers of the SPO pilot, there were statistically significant changes in peak period reductions for 2 of the 8 pricing plans after controlling for differences in customer populations due to attrition One pricing plan showed a modest decrease across the two summers and
one, a CPP pricing plan, showed an increase in average impacts
Average impacts have been relatively constant across six years for PG&E’s SmartRate tariff There has been a significant shift in the population over time so year to year
comparisons do not reflect the behavior of the same customers
There is no evidence of a significant drop in load reductions across days for multi-day events from either the SmartRate or SPO studies
What is the Persistence of Impacts Over Time?
12
Most pilot and program evaluations show that combining TVP rates with load control produces larger peak-period reductions than TVP alone Customers dually enrolled in PG&E’s SmartRate and SmartAC programs
have load impacts roughly twice as large as SmartRate only customers Similar results have been found elsewhere but an apples-to-apples
comparison of like households (e.g., all households have air conditioning) suggests that the incremental effect may be closer to 50%
New studies are needed to assess the extent to which the new generation of market driven smart thermostats (e.g., Nest, Ecobee, etc.) generate incremental demand response and energy conservation impacts
The book is definitely still out regarding whether in-home displays produce incremental DR impacts and which IHDs (if any) generate cost-effective energy savings
Is There Empirical Evidence that TVP Customers Using In-home Devices Achieve Greater Impacts?
13
Self installation connection rates for IHDs are low In the SPO, almost all opt-in customers checked the box at the time of
enrollment indicating they wanted to receive a free IHD but only about 1/3 had the device connected at any time during the second summer of the pilot
Less than 25% of default customers, who had to proactively request an IHD, asked to receive one but almost 60% of these customers had the IHD connected in the second summer
Making it too easy for customers to request an IHD could produce low connection rates as these customers are not “invested” enough in the device to try it or to deal with the connection challenges that often exist
Professional installation is expensive and may lead to lower installation rates due to the need for appointments, but sending devices to 3 households to get one connected is also expensive
Before deciding on the best way to deploy IHDs, a more relevant question is whether they should be deployed at all
What Are The Most Effective Strategies to Deploy IHDs?
For comments or questions, contact:
Stephen GeorgeSenior Vice President, Utility Services
Nexant, Inc.101 Montgomery St., 15th Floor
San Francisco, CA 94104415-777-0707