Last December, Energy Department Assistant Secretary Patricia Hoffman challenged utilities to redefine customer service by finding ways to enable customers to participate more fully in their electric system. She emphasized that as utilities modernize the grid, involving customers in the process is essential in making the grid smarter, more secure, and more reliable.
As head of the Energy Department’s Office of Electricity Delivery and Energy Reliability, Pat has helped lead the way by requiring that some utilities receiving Recovery Act Smart Grid funds study how consumers react to Smart Grid technologies. She has also encouraged utilities to share lessons learned about their customer outreach efforts with other utilities embarking on Smart Grid deployments.
A key requirement of a small number of the Department’s Smart Grid Investment Grants (SGIG) is the conduct of a consumer study with assistance from Lawrence Berkley National Laboratory and the Department. Oklahoma Gas & Electric (OGE), recipient of a $130 million Recovery Act SGIG award, is currently conducting one of these studies.
OGE’s study examines advanced metering, dynamic pricing, and customer education to determine how electricity consumption patterns can change if electricity is priced higher during peak periods. This type of “congestion pricing” has been used in other industries and has been shown to lessen demand. The question is: how well will it work with electricity and, more importantly, will customers like it?
The first phase of OGE’s study has already been completed and involved about 2500 randomly-selected volunteers – both residents and small businesses – who participated in one of two peak pricing programs. Peak pricing involves customers paying a higher price during those hours on days when the electric system is running full out (e.g., the hottest summer days) and a lower price when demand is low and ample supplies are available. OGE’s results for last summer include:
- Customers with smart thermostats reduced their electricity use by as much as 57 percent during peak periods as compared to a control group. Participants on the Variable Peak Pricing program used less electricity when prices were high. In fact, average peak period electricity use was about 33 percent lower during high price periods.
- OGE’s researchers found its approach to involve customers through outreach education and focus group dialogues to be effective. OGE plans to take the lessons learned from these “Phase 1” results and apply them in the second phase starting this summer. OGE has also shared some lessons learned about its customer outreach experience with First Energy, another Recovery Act SGIG recipient.
In addition to SGIG consumer studies, recipients of funding from other Department of Energy Recovery Act grant programs like the Pecan Street Project – which is getting $10.4 million for a Smart Grid Demonstration – are conducting their own independent studies. The Pecan Street Project just completed installation of Smart Grid systems in 100 “green-built” homes (11 of which have roof-top solar PV systems) in Austin, Texas' Mueller Community. Another 100 homes built under traditional codes ten years ago will be added this spring to compare results against the green homes. Researchers will then spend one year learning about how all of these study volunteers use smart grid technology to manage their energy consumption.
According to Pecan Street Project Executive Director Brewster McCracken, "The customer will have final say about whether the smart grid is a smart idea." This feedback will help researchers design new and better home smart grid systems. Pecan Street Project is already planning to expand the study to 1,000 homes and 75 commercial customers in the future.
"There is strong support for this smart grid project in the Mueller community," said Kathy Sokolic, one of the two Mueller residents that serve on the project's executive committee. "Having residents on the project team has played a big role in creating a sense of ownership in Pecan Street Project's work."
While early results from OGE and Pecan Street Project help demonstrate that customers are willing to change the way they use electricity in response to home smart grid systems and dynamic pricing programs that save them money, it is critical that energy providers continue to encourage customers’ participation in these programs through outreach and education. It’s also vital for utilities with good outreach approaches to share lessons learned with others so energy customers can realize the experiences of OGE’s and Pecan Street Project’s customers across the country.