Demand Response Programs Donnie Clary CoServ President/CEO
CoServ at a Glance Counties served: Collin, Cooke, Denton, Grayson, Tarrant and Wise Total meters: Electric 215,000 Gas - 108,000 Electric load: Annual Energy 4,970,000 MWH Peak Load 1,350 MW Employees: 450 Member of Brazos Electric (G&T) CoServ Gas wholly owned by CoServ Electric
CoServ s Service Area
more rural more urban Population Density
Electric Choice in Texas Electric Co-ops Customer Choice CoServ Service Area *map not exact
Retail Electric Providers - over 50 different companies
Retail Electric Providers over 173 different rate plans Plans branded as: Smart Value Free Weekends Variable Rate Texas Power Savings Simple Green PowerFlex
Why does CoServ chase the peak? Demand charges are based on CoServ s system peak at the time of Brazos and ERCOTs respective Coincident Peaks (CP) CoServ s wholesale power Coincident Peak kw (4CP) Demand Charge is 60% of total power cost Effective demand response programs could result in significant savings
Demand Response: Chasing the Peak CoServ s annual monthly billing demand is the average of the CP kw s of the 4 summer months This average sets our monthly demand charge for the next 12 months Peak demand window is typically between 5:00 pm and 6:00 pm
Demand Response: Chasing the Peak CoServ s monthly transmission demand charges for the following 12 months are set based on CoServ s 4 summer CP at the time of the ERCOT 4 summer CP
Challenges When Chasing the Peak How much Demand Response to deploy and when to deploy it It is critical to accurately predict the power supply peak day and time CoServ (and all of ERCOT) is a summer peaking system, driven by cooling load Predicting the Peak CoServ and Brazos each use a third party service for peak prediction Both services use CoServ, Brazos, and ERCOT system historical and real-time load data, real time weather data and statistical methodologies to predict probability of peak Having two different service providers gives us the ability to compare their performance
CoServ Demand Response Programs Beat The Peak program Voluntary customer participation Rush Hour Rewards NEST learning thermostats
Beat the Peak Program 100% voluntary Customer self-initiated curtailment - reduce energy consumption in any form during peak events Entered in a drawing for a Nest thermostat, no other customer incentives CoServ uses a notification application to automatically notify participants according to the notification method indicated by the participant during enrollment process Average enrollment in this voluntary program for the Summer of 2016 was 300 participants
NEST Rush Hour Rewards Another cooperative was having discussions with NEST about their demand response capabilities and provided us with contact information We contacted NEST and they performed a Zip Code analysis for CoServ Analysis showed 15,000+ thermostats within CoServ service area Showed us that NEST had significant traction within our member population CoServ s Energy Innovations Committee Developed the business case for a demand response program using the NEST Rush Hour Rewards program Negotiated the terms of an agreement with NEST
Nest Rush Hour Rewards Program Event can be called any day between May 21st to September 20th limited to 16 events during that period and no more than 3 consecutive events in a week Member remains in control but Less than a 5% opt-out rate because of the ability to learn and pre cool
Nest Rush Hour Rewards Member enrolls thermostat in program through Nest portal Before we started the program, NEST identified 15,000 thermostats registered in our service area CoServ uses the Nest utility portal to input start and end times for demand reduction event Must have 2 hours lead time on start time due to pre-set 2 hour pre-cooling prior to event start Maximum duration of a reduction event is 2 hours Interval data from our AMI helps us verify are obtaining the results and participation NEST says we are getting
NEST RHR Advantages No capital investment is required by CoServ Members enroll existing NEST or purchase a NEST There s nothing to install or maintain in customers homes - CoServ communicates with NEST, which triggers thermostat instructions Lack of capital investment limits exposure to changes in the power supply market
Two Target Markets Don t Own a Nest Buy a Nest Owns a Nest
How did CoServ promote the program? Magazine Consumer on Twitter Website Facebook Nest promotions in combination with CoServ paid, owned and earned media contributed to the Marketing success of Rush Hour Rewards
NEST Marketing Support Email blast by Nest to Nest users promoting RHR program offered by CoServ to Nest customers Nest advertising co-branding with CoServ in Nest retail outlets
Budgeted Enrollments 12,000 10,000 8,000 6,000 4,000 2,000 0 2016 2017 2018 Cumulative Pro Forma Actual
Enrollments 12000 2016-2017 Demand Response Program Enrollments Still growing! 10000 Nest July 4th week Co-branding in stores 8638 9771 10320 10538 8000 6000 4000 2000 Nest email 3212 1986 1695 Nest 2nd email 4916 4739 4556 3726 3514 2820 2942 3047 2170 2302 3611 5815 3921 6338 4082 6614 4381 7088 4805 7222 5418 6126 6611 6739 0 151 15-Apr 4-May 13-May 20-May 27-May 20-Jun 27-Jun 1-Jul 8-Jul 15-Jul 22-Jul 5-Aug 6-Sep 1-Nov 1-Jan 1-Mar 1-May Nest Users Nest Devices Linear (Nest Users) Linear (Nest Devices)
What does the program cost? Customer incentives 1 st yr - $100 bill credit for up to 2 thermostats 2 nd and 3 rd yr - $40 bill credit per participant No capital investment Initial set-up costs with NEST and annual cost with third party peak prediction firm
How does CoServ fund the program? Brazos provides its members with an option to add energy efficiency and demand response surcharges to their monthly power bills This allows CoServ to match the cost of the program with the power supply savings from the program Both the cost of the program and the savings from the program flow through to our members in their power cost
Demand Response Program Benefit/Cost DR Program Benefits kw Reduction per Thermostat 1.25 Demand Cost per kw $96.00 Annual Savings Benefit $120.00 Benefit over Three Years $360.00 DR Program Costs and Expenses Initial Incentive per Thermostat $100 Annual Participant Incentive $40.00 Participants per Thermostat 0.64 Annual Recurring Cost per Thermostat $34.41 Total Annual Cost per Thermostat $93.50 Total Cost Over 3 Years $280.50 Net Benefit per Thermostat $79.50 Benefit/Cost Ratio 1.28
Demand Response Program Benefit/Cost $10,000,000 $8,000,000 CoServ Demand Response Program Cummulative Net Benefit Net Benefit of program shared with all CoServ members through lower wholesale power cost $6,000,000 $4,000,000 $2,000,000 $0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 ($2,000,000) ($4,000,000) There is value even if program is break-even in a deregulated market where Retail Energy Providers offer cash and other incentives to use their services Cummulative Net Benefit Annual Cost Annual Savings
Privacy concerns about NEST accessing usage or data Members were already sharing info with NEST we are not the one sharing data
I m interested in doing anything for conservation that I can. This program was reason enough to purchase a wireless thermostat. - Julie Wesley of Aubrey, CoServ Member who participates in Rush Hour Rewards