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Discover how the Smart Grid addresses industry challenges like rising energy costs and tough regulations, empowering customers to save on bills through initiatives like Smart Energy Pricing and PeakRewardsSM. This transformational initiative improves utility operations, enables energy reductions, and supports new consumer products. Learn about the benefits, cost comparisons, and customer response from pilot programs.
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Smart Grid: What’s In It for the Customer?Wharton Energy Conference 2010 Wayne Harbaugh , Vice President, Pricing & Regulatory Services
Key Challenges and Opportunities Confronting Our Industry • Increasing demand and rising energy costs in the long term • Significant investments needed in new and replacement infrastructure • Resource adequacy and transmission congestion • Tougher environmental regulations • Ability to accommodate growing levels of intermittent, renewable energy • Emergence of plug-in electric vehicles (EVs) • Emergence of Smart Appliances that move energy use from one period to another Smart Grid addresses each of these challenges …
BGE PeakRewardsSM Program • Customers allow “smart cycling” of their air conditioning in exchange for annual bill credits • Choice of “smart” thermostat or outdoor switch • Choice of three levels of cycling – 50%, 75%, or 100% -- and up to two over-rides per summer • Ability to remotely adjust temperature settings • Over 306,000 residential customers enrolled • Produces the equivalent capacity of building a large new power plant at a fraction of the cost • Will move to two-way communications via Smart Grid Cost Comparison - PeakRewardsSM: $165 per kW - New Peaking Plant: ~$1,000 per kW
Energy Efficiency & Conservation Initiatives A portfolio of initiatives to lower energy bills and increase efficiency: • Efficient lighting and appliances • Heating and cooling • Home energy audits and retrofits • New construction • Targeted low-income programs • Custom solutions for large commercial accounts • Significant opportunities to reduce energy waste Cost Comparison: - Cost to reduce consumption: 2-3 cents per kwh - Cost to supply more power: 9-10 cents per kwh
Smart Grid: A Transformational Initiative Driving improvements in utility operations and energy delivery
Smart Grid: A Transformational Initiative Supporting new consumer products and pricing structures to enable energy reductions and cost savings
2008 - 2010 Smart Energy Pricing Pilot: Measuring Customer Response to Price Signals • 1,000 customers randomly selected • Day-ahead notification of a peak event • Rebates offered for energy reductions during peak periods (2 p.m. to 7 p.m.) • Test groups included: • Price incentive only • Price incentive with in-home display (Orb) • Price incentive with Smart Thermostat and Orb • Advanced meters installed to record customers’ usage on an hourly basis to calculate bill rebates Ambient Orb
Dynamic Peak Pricing (aka DPP) Weekdays (excluding Holidays) Pilot Pricing All – in Rate* Critical- $1.30425 Peak $0.14425- Off-Peak- $0.09425 * Includes generation, transmission and delivery $1.30 $0.14 $0.09
Peak Time Rebate: Weekdays (excluding Holidays) A Mirror Image of 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
The SEP Pilot Demonstrated Significant Consumer Interest and Willingness to Adjust Consumption • Customers respond emphatically to pricing signals, reducing consumption by approximately one-quarter to one-third • Average customer savings was $115 • More than 98% reduced their bills
SEP Customer Survey Results 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. (Select one option) Over 93% of customers were satisfied with Smart Energy Pricing; 98% - 99% wished to continue participation
Smart Grid Benefits in Multiple Dimensions • Lower customer bills • Bill credits through Smart Energy Pricing • Empowered consumers managing energy use • Improved reliability • Automated outage reporting / faster restoration • Improved customer service • Virtually eliminates estimated bills • On-demand meter reads • Support for In-Home Networking / Displays • Web Portal • In-Home Displays • Reduced peak load • 500MW through Smart Energy Pricing • 1,700 MW total (~25%) • Reduced O&M • Eliminates manual meter reading • Reduces truck rolls for turn on/off of service • Enhanced storm operations • Better capital planning through improved gas and electric system models • Avoided Cap-Ex A communications network that can be used to provide future smart grid functions such as: • Automated, self-healing network • Remote fault indication • 2-way capacitor control • Reduction of system line losses • Voltage optimization and efficiency gains • Reduced carbon emissions • Lower energy consumption • Reduced need for power plants • Peak load reductions • Infrastructure that can support renewable generation • Wind • Solar • Infrastructure than can support smart charging of Plug-in Hybrid Electric Vehicles
Smart Grid: Over $2.6 Billion in Consumer Savings Life-cycle savings projected to exceed $2.6 billion – several times greater than deployment cost of $500 million! Additional downstream savings likely from reduced line losses and voltage optimization, reduced carbon emissions, and integration with PeakRewardssm!
Full Case Filing History • More info on MD PSC Case 9208 (BGE’s Smart Grid Case) available on PSC’s website • http://webapp.psc.state.md.us/Intranet/Casenum/CaseAction_new.cfm?RequestTimeout=500?