Tuesday, July 16, 2013

National Town Hall shines spotlight on Demand Response

By Patty Durand, Executive Director, SGCC

I was in Washington, D.C., last week for the National Town Hall Meeting on Demand Response and Smart Grid. Let me share a handful of take-aways.

Keynoter Pat Hoffman, the assistant secretary, Office of Electricity Delivery and Energy Reliability at the U.S. Department of Energy (DOE), opened the conference by saying that data is key: extracting value from data will serve both consumers and utilities alike.

Smart grid investments to date, which include interval meters and advanced metering infrastructure (AMI), are producing data that provide customers with their energy usage data, Hoffman noted. And data should enable utilities to operate the grid more efficiently in terms of peak load reduction, demand response and outage restoration.

Although many stakeholders are already familiar with these ideas, Hoffman really emphasized that rigorous analysis of available data should begin to yield not only customer and utility benefits, but metrics that measure those benefits and lay the foundation for further, cost-effective investments in grid modernization. She noted the rise in consumer expectations for reliable service, using extended outages caused by Hurricane Sandy as an example, and she pointed out that a power outage also means a loss of communications when people can’t charge their cell phones.

Most interesting to me was the point she made that consumers are looking for utilities to prioritize restoration – for example, can utilities provide ways for customers to charge cell phones even if the rest of the grid is not up so they can work, communicate with others, and obtain information. And she suggested that utilities would benefit from tracking the use of smartphone-based apps by young people to understand the emerging customer expectations for services and information from power providers.

Modernizing the grid should provide greater reliability, resiliency, environmental performance and cost effectiveness, Hoffman said, and the creation, collection and objective analysis of related data is the path to achieving these goals.

In a panel session, Paul Centolella, currently vice president of the Analysis Group and a former commissioner of the Public Utilities Commission of Ohio, suggested that the current focus on changing customer behavior to achieve demand response is misguided and that automation is the solution. He used the examples of various Web-based, consumer-centric services such as Kayak, for low-price travel options, and Pandora for music. Why not apply the same thinking to energy consumption? Centolella asked.  Matt Rogers, founder and VP of engineering for Nest, which produces Nest Learning Thermostats, joined him in that viewpoint.

An audience poll at the town hall meeting established that demand response generally is not well-understood by stakeholders and that there’s a lack of “information signals” to customers. Both findings seemed to underscore Centolella’s point on automation. A home energy management device, system or service offered by a utility or third party could make the process much simpler and easier for consumers to adopt the practice and realize benefits.

Frankly, I found myself agreeing with these points. Data analysis is increasingly used in all fields to extract meaningful insights. Doing so in the power sector could help establish the basis for cost-effective investments and that, in turn, could provide convincing evidence for consumers of the benefits of grid modernization. After all, consumers pay for the cost of grid modernization and the power industry will need to clearly establish the benefits in order to win regulatory approval to recover their costs. Persuading the consumer with bona fide data on the benefits and cost-effectiveness of investments is a much-needed step in the process. This aligns well with the mission and focus of the Smart Grid Consumer Collaborative. 

Finally, I’d like to note that the DOE released
Voices of Experience: Insights on Smart Grid Consumer Engagement,
at the National Town Hall meeting. SGCC was directly involved in the leadership team that produced the guide and we will stay engaged going forward, by helping steward the document and being the driver for getting the guide into the hands of industry stakeholders who can use it.

On that last point, this new guide is designed to be “user friendly” and the panel that introduced it specifically pointed out the “At a Glance” section on page 6 that lists both the characteristics of consumer engagement as well as the steps to achieve it. No matter where you are in the process of an AMI deployment, the guide can help you understand how to plan for, think about, and execute a consumer engagement program. Even if you are post AMI deployment, the guide has a section on leveraging your new relationship. Please download it and pass the link along to your colleagues.