Friday, November 3, 2017

What's Working in the Smart Grid Era?

With many utility service territories in the United States now post-Advanced Metering Infrastructure deployment, consumer programs enabled by the smart grid have now had several years to mature. Pilot programs have been shelved, tweaked based on participant response and, in some cases, rolled out to the full customer base.

Looking back at the experiences of the past decade, what have we as an industry learned about creating successful smart grid-enabled consumer programs? And have these programs, thus far, been able to effectively deliver promised benefits to energy consumers?

Finding the right setting for smart thermostats in SoCal

Southern California Edison (SCE) has been on the forefront of AMI deployment and smart energy programs and has developed a number of pilot programs over the years to determine what their customers really want. The investor-owned utility, which provides power to about 15 million residents of Southern California, began its AMI investment back in 2009 and has now fully deployed five million smart meters in its service territory.

After installing smart meters, SCE originally thought that the consumer experience for home energy programs would rely on the ZigBee Smart Energy radio that was included in each smart meter. SCE believed a retail market for ZigBee Smart Energy Profile (SEP) devices would develop and that customers would purchase Home Area Network (HAN) devices that could be leveraged for programs like demand response and real-time home energy information.

In the first few years after AMI deployment, SCE experimented with a range of pilot programs – from a meter-connected in-home display (IHD) program to a partnership with home security company ADT that displayed energy information on a security touchscreen. However, most of the programs during this period received only low or moderate consumer interest, and the retail market for smart energy products moved in a different direction than SCE initially anticipated.

Over time, internet-connected smart thermostats and home automation systems proved more popular in the consumer marketplace than HAN devices, and although a connection to the meter is required for real-time energy information, the internet also emerged in recent years as a viable alternative for signaling demand response events.

In the summer of 2013, SCE piloted two smart thermostat-based demand response programs: one with a third-party, internet-only device and one with a meter-connected device. The former program proved to be overwhelmingly more popular with customers. Nearly 20 percent of customers (2,800 participants) in the outreach campaign enrolled in the third-party program compared to only 1.3 percent in the meter-connected program (430 participants). The internet-connected smart thermostat program also resulted in a 90 percent reduction in costs for SCE since the thermostat manufacturers handled much of the outreach and marketing.

Based on the pilot results, SCE discontinued the meter-connected program and decided to expand its third-party smart thermostat program. In addition, to mitigate the effects of the Aliso Canyon gas leak in the summer of 2016 (many of SCE’s peaker plants are powered by natural gas), SCE began offering a $125 incentive to enroll in the smart thermostat demand response program in conjunction with SoCalGas ($75 from SCE, $50 from SoCalGas), which had a substantial impact on enrollment. SCE has also added eligible thermostat brands to the program, which has further increased program popularity. Today, program enrollment is over 40,000, compared with just under 3,000 in the pilot year.

Over the years, SCE has seen the its customer base reap the benefits from its investments in the smart grid, but not always in ways it expected. Somewhat surprisingly, perhaps, its customers didn't seem to see the benefits in having access to real-time energy information -- except for a small customer segment that is highly interested in it. However, customers did see benefits from demand response program participation with smart thermostats; they were able to receive initial and ongoing incentives for reducing energy with minimal impact to the comfort of their homes.

Moving forward, SCE plans to continue to look for ways to leverage consumer market preferences and establish partnerships with non-utility companies with a shared customer base. With the success of its smart thermostat program, the utility is also researching technologies that might be the “next smart thermostat”, including electric vehicles, home automation systems and smart appliances.

Creating a customer-friendly landscape in Illinois

In the Land of Lincoln, significant investment and effort has gone into ensuring that smart grid-enabled programs and services actually serve to benefit consumers and not only utilities, generation companies or other stakeholders. Founded in the early '80s to protect consumers from nuclear power cost overruns, the Illinois Citizens Utility Board (CUB) has been at the forefront of these efforts, serving as a “voice of the consumer” in the Illinois Commerce Commission, Illinois General Assembly and court system, when necessary.

CUB also conducts extensive consumer education and outreach on utility issues, including participating in over 500 community events each year (one-on-one bill consultations, library events, community festivals, etc.) and operating a direct hotline that typically receives about 7,000 calls per year on utility-related questions and complaints. This adds up to a lot of experience on consumers’ primary pain points in their relationship with their utilities.

While CUB has the reputation, one they willingly accept, as a gadfly that's always getting on the utilities’ cases, they generally have a positive outlook on the energy-related changes that are taking place in Illinois. Consumers today have access to a number of tools to take charge of their energy usage, and these programs, thus far, seem to be working for the consumers’ benefit and have generally high satisfaction from those who have used them.

Both major Illinois electric utilities, Ameren Illinois and Commonwealth Edison (ComEd), are fairly far along in their AMI rollouts and share a lot of the same utility programs in their respective halves of the state. CUB has typically been supportive of many of these programs, including energy efficiency, A/C cycling, hourly pricing and peak-time rebates, and has been active in educating consumers on the benefits of these programs and, in many cases, also enrolling them.

Over the years, CUB has gained significant experience about what it takes for energy-saving programs to be effective for consumers. One important factor is that utilities offer a variety of programs that meet the needs of different types of consumers. For example, some consumers may gravitate toward ground-level, low-risk programs (like peak-time rebate), while others may prefer programs that require more in-depth engagement or initial financial investment (like a smart appliance-based program). In CUB’s view, utilities also must be acutely aware of the digital divide that exists between various cohorts of consumers and design programs accordingly.

Of course, for CUB to support a particular utility program, it’s essential that it actually works in the ways that the utility claims it does, i.e. that it’s easy to understand and enroll in, that the technology functions smoothly, that promises are kept and that customer service provides adequate support. Finally, when looking for an effective utility program, CUB wants to see the utility involved take a holistic view for how it fits in the consumer’s world, which can help overcome barriers to entry. On this point, CUB works extensively with the Illinois Science & Energy Innovation Foundation (ISEIF), a nonprofit that supports energy consumer education.

Has Illinois been able to move the needle on realizing consumer benefits from its smart grid investments? So far, the answer is overwhelmingly “yes”. When AMI rollout started in Illinois, there was some apprehension that there would be a significant consumer backlash and that consumers wouldn't take advantage of smart meter-enabled programs. However, neither have come to fruition thus far.

Overall, Illinois consumers have been highly satisfied with new energy programs, and the utilities have seen relatively high enrollment numbers. In many cases, CUB has seen consumers that you wouldn't necessarily expect to see as “early adopters” enrolling in these programs. In addition, Illinois recently passed the Illinois Future Energy Jobs Act (FEJA) to build on the AMI investment with the expansion of distributed energy resources.

Conclusion

While we're still relatively early in the smart grid era, in Southern California and Illinois at least, progress is being made in effectively delivering benefits to consumers from the significant investments that have been made in the smart grid. As early supporters of smart grid technologies, Ameren, ComEd and SCE (along with the stakeholders that work with them) have been able to learn from first- and second-generation programs and apply these lessons to design programs and services that more adequately meet their customers’ needs. Efforts are already underway in both areas to further capitalize on smart grid investments in order to bring additional benefits to consumers.


To learn more about how investments in the smart grid have resulted in benefits for consumers, register for the 2018 Consumer Symposium on Monday, Jan. 22 in San Antonio.

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