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BGE’s Smart Energy Pricing
The National Town Meeting on Demand Response and Smart Grid
Cheryl Hindes
Director -- Load Analysis and Settlement
July 14, 2009
BGE’s 2008 Smart Energy Pricing (SEP) Pilot featured Peak
Time Rebate and Critical Peak Pricing
 Pilot of 1,375 residential customers in Summer 2008: 1,021 participants, 354 control group
 Pilot included Dynamic Peak Pricing (DPP or CPP) and Peak Time Rebate (PTR)
 Customers were given day ahead notification of critical peak event by their choice of methods
 E-mail, telephone call, text message (up to 5 of each)
 Certain had the Ambient Energy Orb, signaling prices by color code and pulsing light
 Sample of customers had ‘enabling technology’ (ET = smart A/C switch)
 Very favorable customer satisfaction results confirm customers’ interest
 Key findings of impact assessment conducted by The Brattle Group:
 Price elasticities for DPP and PTR were not statistically different
 On average customers save
 22 – 37% at peak conditions* (*PJM definition: hour ending 17:00 with WTHI of 83.1)
 18 – 33% during 50 critical hours
BGE®, A Constellation Energy Company
1
Dynamic Peak Pricing: Weekdays (excluding Holidays)
1.40
Current Rate
$1.30
Critical Peak
1.20
New Rate
Rate ($/kWh)
1.00
Pilot Pricing
All – in Rate*
0.80
Critical $1.30425
Peak
$0.14425
Off-Peak $0.09425
0.60
0.40
0.20
$0.14
$0.09
0.00
* Includes
generation,
transmission and
delivery
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of Day
BGE®, A Constellation Energy Company
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Peak Time Rebate: Weekdays (excluding Holidays)
A Mirror Image of the DPP Rate
- Schedule R summer rates are
$0.14 / kWh for all summer
hours
- Up to 12 critical peak days will
be called by 6 p.m. the prior day
- Customers who use less during
the critical period (2 – 7 p.m.) on
any critical peak day will receive
a rebate. Two levels being
tested:
– $1.75/kWh
– $1.16/kWh
BGE®, A Constellation Energy Company
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Smart Energy Pricing Pilot Design
Total
PTR Low
Rebate
PTR High
Rebate
Dynamic
Peak Pricing
Control
Group
675
125
125
125
300
With Orb
Technology
250
125
125
0
0
With Orb and AC
Switch Technologies
375
125
125
125
0
Total
1300
375
375
250
300
Group
Without Enabling
Technology
BGE’s SEP Pilot: 1,300 accounts, a statistically significant sample
BGE®, A Constellation Energy Company
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Summer 2008 Pilot
Smart Energy Pricing - Peak Demand Reductions *
Average Customer
0%
-5%
No
Tech
Orb &
Switch
No
Tech
% Change in Critical Peak Demand
-10%
Orb
Orb
Only
& Switch
Orb &
No
Switch
Tech
No
Orb
Tech Orb Only
Only
Orb &
Orb
Switch
DPP Tariff
& Switch
Low Rebate
$1.16 / kWh
-15%
High Rebate
$1.75 / kWh
-20%
-22.3%
-25%
-25.4%
*Peak demand
reductions are
defined for HE
17:00 for THI of
83.1 degrees
-26.0%
-26.9%
-30%
-31.9%
-31.2%
-35%
-36.5%
-36.8%
-40%
Program Type
BGE®, A Constellation Energy Company
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Summer 2008 Pilot
Average Energy Savings over Critical Events **
0%
Impact
No
Tech
-5%
Orb &
Switch
No
Tech
Orb
Only
Orb &
Switch
No
Tech
Orb
Only
Orb &
Switch
Low Rebate
$1.16 / kWh
-10%
% Change in Critical Peak Demand
DPP Tariff
-15%
High Rebate
$1.75 / kWh
-17.8%
-20%
-20.1%
-20.9%
-23.0%
-25%
-26.8%
-28.5%
-30%
-32.5%
-32.9%
** Critical events
are the first 10
(of 12) called
events during
2008 pilot from
HE15:00 to
HE19:00
-35%
-40%
DPP
DPP_ET_ORB
PTRL
PTRL_ORB
PTRL_ET_ORB
PTRH
PTRH_ORB
PTRH_ET_ORB
Program Type
BGE®, A Constellation Energy Company
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Customers Were Satisfied with Smart Energy Pricing!
On a scale of 1 to 5, where 1 is "Very Dissatisfied" and 5 is "Very Satisfied", please rate your overall
satisfaction with the pilot program. (77% response rate)
93% Were
Satisfied
Over 60% Were
Very Satisfied
BGE®, A Constellation Energy Company
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Customers Think Smart Energy Pricing Should be the Standard
During your pilot participation, you experienced a variable rate program where energy used during critical
peak periods cost more than energy use during other times. Customers saved money by using energy
during non-critical peak periods. Do you think this pricing format should be standard for all BGE
customers? (Select one option)
4/5 of PTR
participants
think smart
energy
pricing
should be
standard for
all BGE
customers
97% would like to return to the same pricing structure in 2009
BGE®, A Constellation Energy Company
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PTR More Favorable than DPP, Overall 93% Satisfied
On a scale of 1 to 5, where 1 is "Very Dissatisfied" and 5 is "Very Satisfied", please rate your overall
satisfaction with the pilot program. (77% response rate)
2/3 of PTR
Customers
Were Very
Satisfied
About Half of
DPP Customers
Were Very
Satisfied
BGE®, A Constellation Energy Company
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Peak Time Rebate Widely Favored
 BGE held 6 focus groups in 2007 focused on CPP
 Our customers said they need help in understanding their usage and how
they could save
 Our customers said CPP could not be a default rate
 More customers were very satisfied with PTR (66%) than with CPP (48%)
 MD PSC and Office of People’s Counsel questioned the appropriateness of
CPP as default and favored PTR instead
 Most (81%) PTR participants think PTR should be standard (default) pricing
DOE’s FOA notes its interest in CPP and RTP
BGE’s experience suggests adding PTR to the mix
BGE®, A Constellation Energy Company
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Appendix
BGE®, A Constellation Energy Company
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Summer 2008 Pilot
Summary of The Brattle Group Analysis
Peak Demand Savings***
Program
Energy Savings for SEP Critical Events**
Participant Peak
Reduction
Control Group
Average Usage
Average Participant
Reduction
Number of
Customers
Control Group
kW
%
kW
kWh/hour
%
kWh/hour
126
141
113
3.19
3.19
3.19
22.3%
26.9%
31.9%
0.71
0.86
1.02
2.70
2.70
2.70
17.8%
23.0%
28.5%
0.48
0.62
0.77
127
137
118
3.19
3.19
3.19
26.0%
31.2%
36.8%
0.83
1.00
1.17
2.70
2.70
2.70
20.9%
26.8%
32.9%
0.56
0.72
0.89
148
111
3.19
3.19
25.4%
36.5%
0.81
1.16
2.70
2.70
20.1%
32.5%
0.54
0.88
PTR Low - $1.16 / kWh
No Technology
Orb Technology
Orb and Switch Technologies
PTR - $1.75 / kWh
No Technology
Orb Technology
Orb and Switch Technologies
Dynamic Peak Pricing
No Technology
Orb and Switch Technologies
** 'SEP Critical Events' are defined as the 10 hottest critical events during the 2008 summer from HE 15:00 to HE 19:00
*** 'Peak Demand Savings' are defined as hour ending 17:00, for WTHI of 83.1 degrees
WTHI = [current day’s THI]*(10/14)+ [previous day’s THI] * (3/14)+ [two day's ago THI] * (1/14)
THI t = 17.5 + .55*DryBulb t + .2*WetBulb t
BGE®, A Constellation Energy Company
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Despite Unseasonably Mild Weather, BGE called 12 Smart
Energy Pricing Events in 2008
June 2008
Sun
1
2
3
4
8
9
10
11
12
13
14
15
16
17
18
19
20
22
23
24
25
26
27
29
30
96
5
6
High
Temp
92
July 2008
Sun
7
1
2
3
4
5
10
11
12
6
7
8
9
21
13
14
15
16
28
20
21
22
23
24
27
28
29
30
31
89
90
17
92
18
25
92
19
26
91
August 2008
Sun
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
92
24
25
31
26
27
28
29
30
September 2008
Sun
1
2
3
7
8
9
10
14
15
16
21
22
23
28
29
30
73
5
6
11
12
13
17
18
19
20
24
25
26
27
92
4
92
72
BGE®, A Constellation Energy Company
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Smart Energy Pricing Continues in 2009
 Small commercial customers added
 Assessing the level of savings as compared to the
Summer of 2008 for returning residential customer
 Added Smart Thermostats (in addition to Smart Switches)
 Added Twitter
 Tips, notifications, reminders, “way to go!”
 Posted 20 Tweets in June
 Simulating “PJM Emergency Events”
 Notification 30 – 60 minutes prior to event
BGE®, A Constellation Energy Company
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BGE Service Territory
BGE®, A Constellation Energy Company
BGE’s Business at a Glance
Accounts (in thousands)
Electric
Residential
Commercial
Industrial
Total
Electric T&D
- delivers through 2,300 square miles
of territory
1,033.4
108.9
5.0
1,147.3
- circuit miles:
– 21,819 of distribution
(< 34.5 kV)
– 1,297 of transmission
( > 115 kV)
Gas Distribution
Gas
Residential
Commercial
Industrial
Total
553.7
40.1
1.4
595.2
- stores and delivers gas
– two peak shaving plants
– nine gate stations
– 5,870 miles of gas main
BGE®, A Constellation Energy Company