California Statewide Pricing Pilot-------------------
Lessons Learned
Roger Levy
Demand Response Research Center
NARUC Joint Meeting
Committee on Energy Resources and the Environment
Committee on Electricity
August 2, 2006
No more rotating outages – EVER !1
Efficiency and demand response fully integrated under a unified default tariff / incentive structure.
Demand response is a condition of service.
All customers, all load participates.
2
Major appliances come “DR Ready” from the factory.
All buildings are “DR Enabled” .3
Full automated system integration between the ISO, utilities and customers.
4
Demand Response – the Vision
August 2, 2006
California Statewide Pricing Pilot
August 2, 2006
State Demand Response Objectives
Integrate energy efficiency with demand response
Economic Response – Let the customer decide.
Reliability Response – Provide the utility with
control.
All customers – not just a select few.
August 2, 2006
Summary Conclusions
Residential CPP rates can, within five years of deployment reduce California’s peak load by 1,500 to over 3,000 MW.
System Impacts
Dynamic rates encourage greater conservation and peak demand impacts than conventional inverted tier or time-of-use rates.
Conservation and Peak Load
Impacts
Residential and small to medium commercial and industrial customers understand and overwhelmingly prefer dynamic rates to existing inverted tier rates.
Customer Acceptance
August 2, 2006
Source: Statewide Pricing Pilot Summer 2003 Impact Analysis, Charles Rivers Associates, August 9, 2004, Table 1-3, 1-4,.
Time of Use TOU
Critical Peak Impacts By Rate Treatment
0%
10%
20%
30%
40%
50%
Pe
ak
Lo
ad
Re
du
cti
on
Critical Peak Fixed
CPP-F
4.1%
Critical Peak
Variable With
Automated Controls
CPP-V
34.5%
12.5%
Critical Peak
Variable With
Automated Controls
CPP-V
47.4%
Average Critical Peak Day – Year 1Hottest Critical
Peak Day *
Residential Load ImpactsRate and
Technology
August 2, 2006
Time of Use TOU
0%
10%
20%
30%
40%
50%
Pe
ak
Lo
ad
Re
du
cti
on
Critical Peak Fixed
CPP-F
0.6%
Critical Peak
Variable With
Automated Controls
CPP-V
27.2%
13.1%
Critical Weekday – Inner Summer Year 2
Critical Peak Impacts By Rate Treatment
Residential Load ImpactsRate and
Technology
Source: Impact Evaluation of the California Statewide Pricing Pilot, CRA, March 16, 2005, Table 1-1, 4-3.
August 2, 2006
Residential SPP Impacts
Source: 1. Statewide Pricing Pilot Summer 2003 Impact Analysis, Charles River Associates, Table 1-3, 1-4, August 9, 2004. Hottest day impacts on page 105.2. Private communication, residential pilot study, May 2005.3. Results of the Pilot Residential Advanced Energy Management System, Gulf Power, November 1994.4. Levy Associates case study report, July 1994.
0%
10%
20%
30%
40%
50%
Pe
ak
Lo
ad
Re
du
cti
on
Three Tier TOU with
Dispatched CPP
Midwest Pilot 2
2004
Three Tier TOU with
Dispatched CPP
35.0%
Two Tier TOU with
DispatchedCPP
Gulf Power Pilot 3
1992-1993
California Pilot 1
2003
34.5%34.8%
Average Critical Peak Day
Two Tier TOU with
DispatchedCPP
47.4%
Hottest Critical Peak Day *
California Pilot 1
2003
Three Tier TOU with
Dispatched CPP
AEP Pilot 4
1991
41.0%
Consistency
August 2, 2006
Residential SPP Impacts
Residential Response with Automation: Participation Incentive vs. Critical Peak Rate
kW
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Noon 2:30 7:30
Critical Peak Rate
Participation Incentive
Control Group
Midnight
CPP Event
Hot Day, August 15, 2003, Average Peak Temperature 88.50
Incentives
August 2, 2006
Residential SPP Impacts
Source: Statewide Pricing Pilot, Summer 2003 Impact Analysis, CRA, August 9, 2004, Table 5-9, p.90
Percent Reduction in Peak Period Usage (CPP-F) Year 1
0
2
4
6
8
10
14
16
18
20
Pe
rce
nt
Re
du
cti
on
12
High vs. Low User
200% A
verage U
se
50% A
verage U
se
17.2%
9.79%
Central AC Ownership
YE
S
NO
12.8%12.3%
Pool Ownership
YE
S
NO
19.2%
12.1%
Income
> $100,000
< $40,000
15.1%
12.1%
Single vs. Multi-Family
Sin
gle F
amily
Mu
lti-family
13.5%
9.8%
State-wide Average
12.5%
Demographics
August 2, 2006
Source: Statewide Pricing Pilot, Summer 2003 Impact Analysis, CRA, August 9, 2004, Table 5-9, p.90
Percent Reduction in Peak Period Usage (CPP-F) Year 2
0
2
4
6
8
10
14
16
18
20
Pe
rce
nt
Re
du
cti
on
12
High vs. Low User
200% A
verage U
se
50% A
verage U
se
14.7%
12.2%
Central AC Ownership
YE
S
NO
17.4%
8.1%
Pool Ownership
YE
S
NO
15.8%
13.0%
Income
> $100,000
< $40,000
16.2%
10.9%
Single vs. Multi-Family
Sin
gle F
amily
Mu
lti-family
14.0%
11.8%
State-wide Average
13.1%
Residential SPP Impacts Demographics
August 2, 2006
0
2
4
6
8
10
14
Pe
rce
nt
Re
du
cti
on
12
Small C/I Load ImpactsRate and
Technology
Critical Peak Impacts Enabling Technology Impacts
With
Tech
no
log
y
< 20 kW
0.8%
13.2%
No
Tech
no
log
y
With
Tech
no
log
y
> 20 kW
4.9%
9.6%
< 20 kW
6.6%
> 20 kW
5.5%
August 2, 2006
SPP – Customer Rate Preferences
Original Inverted Tier Rate
Pilot Rates
Res
iden
tialCPP-V
CPP-F
TOU
80%
81%
20%
23%
19%
Co
mm
erci
al
CPP-V
TOU
77%
71%
70%
2040 20 40 60 80
30%
29%
060
August 2, 2006
Contact Information
Demand Response Research Center (DRRC)
Mary Ann Piette, Director
Phone: 510 486-6286
email: [email protected]
Roger Levy
Program Development and Outreach
Phone: 916-487-0227
email: [email protected]
August 2, 2006
Demand Response Defined.
1. Demand Response applies rate designs, incentives and technology to induce changes in customer demand. 1
2. Demand Response is the action taken to
reduce load in response to:2
a) Contingencies that threaten the supply-demand balance and/or
b) Market conditions that raise supply costs.
1. CPUC definition, Demand Response Settlement, Draft Decision 03-06-032, March 2006
2. Demand Response Research Center, presentation, December 2005.
August 2, 2006
CPP Tariff- (high)TOU Tariff- (high)
$0.7336
$0.2336
$0.0886
0
10
20
30
40
50
60
70
80
Ce
nts
pe
r k
Wh
Existing RatesAvg. Summer Price
13.36 ¢/kWh
$0.2596
$0.1026
2:00-7:00pmWeekdays
Other Weekday & Weekend hours
2:00-7:00pmWeekdays
Other Weekday & Weekend hours
Dispatched2:00-7:00pm
1,500 hrs/yr 7,260 hrs/yr Maximum 75 hrs/yr 1,425 hrs/yr 7,260 hrs/yr
Critical Peak
Summer Peak
Summer Off-Peak
Residential SPP Rates Rate Design
August 2, 2006
CPPV CPPF TOU Info Only
Participants (%) 71.1% 73.7% 70.0% 79.0%
Average Monthly Savings (%)
5.1% 5.5% 4.5% 5.4%
Average Monthly Savings ($)
$53 $35 $29 $19
CPPV TOU
80.3% 58.2%
12.2% 9.6%
$1,521 $869
Participants (%) 28.9% 26.3% 30.0% 21.0%
Average Monthly Increase (%)
4.0% 6.2% 3.0% 10.0%
Average Monthly Increase ($)
$39 $44 $30 $9
19.7% 41.8%
5.0% 10.0%
$224 $600
ResidentialCommercial /
Industrial
Bill Savings
Bill Increases
Source: Statewide Pricing Pilot, Shadow Bill Results, WG3 report, June 9, 2004.
SPP Bill Impacts
Average Bill Impacts (summer / winter 2003)