Smart Meters Provide Multiple Financial Benefits to Consumers Lisa Wood Executive Director Presented to UTC TELECOM 2010 Indianapolis, IN May 24, 2010
Smart meters provide multiple financial benefits to consumers 4 areas 1. Enhanced customer service via operational improvements Remote meter reading/more accurate bills Automatic connects/disconnect Automated outage detection faster detection, faster restoration 2. Customer energy management benefits Price response benefits from smart rates Conservation, energy management, and load control benefits 3. Utility cost savings (e.g., avoided investments in generation, transmission, and distribution) 4. Platform for distributed generation (e.g., rooftop solar), plug-in hybrid electric vehicles, and home area networks 2
Typical smart meter business case must pass benefit- cost test to gain regulatory approval Quantifiable benefits: Demand response/smart rates Direct load control Information-induced conservation Operating Benefits Remote meter reading Automated outage detection Remote connect/disconnect Other benefits: Building block to Smart Grid, PHEVs, and DG Gateway for home area networks (HAN)/smart apps 60% 50% 40% 30% 20% 10% 0% AMI Benefits SCE example 3
Today s focus: Customer energy management benefits of smart meters 1. Demand response due to smart rates 2. Information induced conservation/energy management 4
% Reduction in Peak Load Smart rates coupled with technology empower and engage customers (multiple pilot results) Estimated household demand response 60% Quantified benefits: Smart price coupled with enabling technology reduce peak demand 20% - 40% 50% 40% 30% 20% TOU TOU w/ Tech PTR PTR CPP CPP w/ w/ Tech Tech RTP RTP w/ Tech Customers save money! 10% 0% 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 1 2 3 4 5 6 7 8 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 Pricing Pilot 5
Change in Monthly Bill As customers on smart rates shift usage, percent of winners increases to almost 80% Distribution of Dynamic Pricing Bill Impacts - Before and After Customer Response - 40% 30% Before Customer Response After Customer Response 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% -10% -20% -30% -40% "Winners" Percentile of Customers "Losers"
Based on recent pilot results, most low income customers benefit from dynamic rates* Index of Pilots and Rates Empirical evidence based on 3 recent pilots 1 CL&P, TOU 15 Pepco DC, RTP 2 CL&P, TOU-w/ technology 16 Pepco DC, PTR 3 CL&P, TOU 17 Pepco DC, CPP 4 CL&P, TOU-w/ technology 18 Pepco DC, CPP-w/ technology 5 CL&P, PTR 19 BGE, PTR 6 CL&P, CPP 20 BGE, CPP 7 CL&P, PTR 21 BGE, PTR 8 CL&P, PTR-w/ technology 22 BGE, PTR 9 CL&P, CPP-w/ technology 23 BGE, PTR-w/ technology 10 CL&P, CPP 24 BGE, PTR-w/ technology 11 CL&P, PTR-w/ technology 25 BGE, PTR-w/ technology 12 CL&P, CPP-w/ technology 26 BGE, CPP-w/ technology 13 Pepco DC, RTP-w/ technology 27 BGE, PTR-w/ technology 14 Pepco DC, PTR-w/ technology *Forthcoming IEE whitepaper, June 2010 7
Change in Monthly Bill Based on pilot results, 80-90% of low income customers will benefit from smart rates 25% 20% 15% Distribution of Dynamic Pricing Bill Impacts - Low Income Customers on CPP Rate - Before Customer Response After Customer Response 10% 5% 0% 0% -5% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% -10% -15% -20% -25% "Winners" "Losers"
Peak Reduction Low income customer responsiveness to smart rates ranges from 50%-200% of avg customer 250% Low Income Customer Responsiveness Relative to Average Customer 200% 200% 150% 100% 50% Average customer response 50% 66% 69% 100% 100% 0% PG&E SmartRate 2009 PG&E SmartRate 2008 California SPP BGE 2008 CL&P's PWEP Program Pepco DC Note: The California SPP and Pepco DC low income results are compared to non-low income customers, not the average customer.
Over a dozen utilities now partnering with vendors (e.g., Opower) to help customers manage energy by taking advantage of real time smart meter information Old approach: Utilities send out monthly Energy Reports to motivate customer action and compare to neighbors Avg. cost $0.03 per kwh saved. Energy savings of 2-3% each month New approach: taking advantage of smart meters by providing real time energy updates [e.g., ComEd pilot]. Flagship Product Home Energy Report Efficiency Portal Utility Partners: Large-Scale Customer Engagement 10
Commonwealth Edison s major AMI pilot with customer centric design: testing smart rates and information induced conservation (May/June launch) Customer education innovations Web energy management tools including comparisons; educational modules; monthly updates In home displays, programmable communicating thermostats Community support/partnering with CUB and CNT Customer energy management assistance Via bill comparisons, web tools, call center, monthly educational meetings About 131,000 customers 8,500 on smart rates 120,000 smart energy mgmt tools 11
Smart meters provide financial benefits to customers: today and in future Benefits today Operational savings/benefits from smart meters Price response benefits multiple dynamic pricing pilot results quantify benefits. Forthcoming IEE whitepaper shows low income benefits. Load control benefits Customer energy management benefits/community approaches and partnerships Future benefits Platform for clean energy future (e.g., DG, PHEVs) 12
Smart meter platform combined with new technologies will take EE and DR to new levels It s all about giving customers the tools & the know-how to be smarter energy consumers. Educate, educate, educate! HAN communication SmartMeter communication 13
For more information, contact: Lisa Wood Executive Director Institute for Electric Efficiency 701 Pennsylvania Ave., N.W. Washington, D.C. 20004-2696 Office: 202.508.5550 Mobile: 202.257.5040 lwood@edisonfoundation.net www.edisonfoundation.net/iee 14