Jun 02 2009

What's So Smart About SmartRate?

Posted by: Jonathan Marshall

PG&E now boasts the nation's largest deployment of smart meters, which measure energy use at frequent intervals throughout the day and automatically communicate the data back to the utility. But what do those meters mean for customers, other than no longer having to tie up your dog when meter readers come by on their monthly rounds?

One big improvement, in addition to giving customers timely and detailed information on their energy use, will be expanded availability of voluntary pricing programs that can save them money and help the environment. Such pricing programs reward customers for cutting back on energy use a few hours each year during periods of "critical peak" demand, typically on scalding days when air conditioners are running flat out.

Timely reductions in load in turn reduce the need to operate expensive natural gas-fired "peaker" power plants, thus minimizing air pollution and greenhouse gas emissions.

Last year, 10,000 customers in Bakersfield signed up for a new program called SmartRate, one of the first critical peak pricing programs for residential and small-and-medium business customers in the United States, and the first to use data from advanced meters.

The award-winning program gives enrolled customers a discount of about 3 cents per kilowatt hour on electric bills from June 1 to September 30. In return, residential customers pay a rate surcharge of 60 cents for electricity used from 2 p.m to 7 p.m. on up to 15 days a year when soaring temperatures drive up demand on PG&E's grid.

The program is a win-win for customers and PG&E. On the nine peak "SmartDay" events called by PG&E last year, customers cut their average usage by about 17 percent. More than two-thirds of customers said they enjoyed savings. Nine in 10 customers said they intended to stick with the program.

Said one customer, insurance agent Randel Thompson, "This was one of the easiest tasks I have ever joined. . . . Makes for a nice reward at the end of the month and saves us all energy and money." Mary Noriega, another customer, commented that shifting power use to the morning or evening was "all it takes" to save money. "Also, get into the habit of turning off lights, fans, etc. when you leave the rooms. It is very easy to do and worth it!"

Impressive results like these help explain why "demand response and peak shaving have jumped to the top of the list as drivers of Smart Grid implementation at North American utilities," according to new research from Pacific Crest Securities.

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