goodcents select – the 21st century residential energy ... white.pdf · slide 1 goodcents select...

GoodCents Select GoodCents Select –– The 21The 21stst Century Century Residential Energy Management Residential Energy Management

ProgramProgram

Brian WhiteBrian WhiteGulf Power CompanyGulf Power Company

Pensacola, FloridaPensacola, FloridaMay 2, 2003May 2, 2003

GoodCents Select GoodCents Select –– Program DevelopmentProgram Development

�� The Critical Peak Pricing NotionThe Critical Peak Pricing Notion–– Four Four InterdependentInterdependent ComponentsComponents

1.1. A timeA time--varying rate design with a varying rate design with a near realnear real--time pricing component,time pricing component,

2.2. An inAn in--home, customerhome, customer--programmed, automated energy programmed, automated energy management (AEM) system, management (AEM) system,

3.3. A way to rapidly communicate rate A way to rapidly communicate rate changes, critical peak conditions, changes, critical peak conditions, and other messages to program and other messages to program participants, andparticipants, and

4.4. A means of recording and retrieving A means of recording and retrieving the requisite billing determinants.the requisite billing determinants.

GoodCents® SELECTResiden tial Service Variable Pricing (Rate Schedule

RSVP)

•Standard Residential Customer Charge applies: $10.00 per month

•RSVP Participation Charge: $4.95 per month

•Prices per kWh (includes energy charge, fuel, ECCR, PPCC, and ECRC)

Low 4.2 cents/kWh

Medium 5.4 cents/kWh

High 10.0 cents/kWh

Critical 30.9 cents/kWh

Standard Residential Rate: 6.3 cents/kWh

– The “full cost” of responding to The “full cost” of responding to price changes is much more price changes is much more than the price difference.than the price difference.

�� Customers must act in order to Customers must act in order to respond.respond.

�� These actions require time and These actions require time and effort.effort.

–– Lowering the incremental Lowering the incremental “cost” of responding should “cost” of responding should increase the amount of price increase the amount of price response.response.

–– An inAn in--home, customerhome, customer--programmed, automated programmed, automated energy management system energy management system lowers this “cost” that lowers this “cost” that customers must bear.customers must bear.

Customer Control

A Rate Design

Comm

unica

tions

Metering



–– Rate changes and critical Rate changes and critical supply conditions must supply conditions must be communicated to be communicated to consumers if we expect consumers if we expect them or their systems to them or their systems to invoke the preinvoke the pre--selected, selected, prepre--programmed programmed responses.responses.


–– Customer’s energy consumption Customer’s energy consumption must be tracked and measured.must be tracked and measured.�� The meter must know what The meter must know what

price or rate is in force at all price or rate is in force at all times so that it can accurately times so that it can accurately “bucket” the energy used.“bucket” the energy used.

�� A near realA near real--time pricing time pricing component implies that both component implies that both the customer’s energy the customer’s energy management system and the management system and the customer’s meter will need to customer’s meter will need to know about it.know about it.

Major ComponentsMajor Components

Communications Gateway

SuperStat

RSVP Rate

PriceStatPriceStat for 2003for 2003

GoodCents SelectGoodCents Select�� Gulf Power’s Three Research Gulf Power’s Three Research

QuestionsQuestions

1.1. Could AEM reduce the need for Could AEM reduce the need for generation?generation?

2.2. Would AEM enable existing capacity to Would AEM enable existing capacity to be better used?be better used?

3.3. Would AEM provide customers with Would AEM provide customers with value?value?

GoodCents® SELECT1/4/02 Critical time 9:00 AM to 10:00 AM

0123456

1 6 11 16 21

Time

kWTest Group

Control Group

Preliminary

GoodCents® SELECT1/8/02 Critical time 6:00 AM to 7:00 AM

0123456

1 6 11 16 21Time

kW Control Group

Preliminary

GoodCents® SELECT

1/2 /02 No C ritical

0.0

1.0

2.0

3.0

4.0

5.0

1 5 9 13 17 21T ime

kW

Preliminary

7/17 /0 2 C r i ti ca l t im e 4 :0 0 P M to 5 : 00 P M

0

1

2

3

4

5

1 6 1 1 16 2 1T ime

kW

T e s t G ro upC o ntro l G ro up

GoodCents® SELECT

Preliminary

7 /1 8 / 0 2 C r it ic a l tim e 2 : 0 0 P M to 4 :0 0 P M

0

1

2

3

4

5

6

1 6 1 1 1 6 2 1T im e

kW

T e s t G ro u pC ontro l G ro up

GoodCents® SELECT

Preliminary

7 /1 6 /02 N o C r i tic a l

00 .5

11 .5

22 .5

33 .5

44 .5

5

1 5 9 1 3 1 7 2 1T i me

kW

GoodCents® SELECT

Preliminary

Price Response results from Gulf Power’s Residential Variable Pricing Rate

Case study of January 24, 2003 peak load day.

Minimum temperature on January 24th was 18 degrees F. Minimum temperature forecast on Gulf’s winter peak day is 27 degrees F.

Gulf Power called a Critical (sent a Critical Price signal to its Good Cents Select customers) on January 24th between the hours of 7a.m. and 9a.m.

Number of residences receiving the Critical Price signal on Jan 24 (via RF paging signals) = 2,744

Winter demand reduction per residence at the generator (accounting for losses) = 3.74kW

Total demand reduction on Jan 24th = 2744 * 3.74 = 10.3mW

Price Response results from Gulf Power’s Residential Variable Pricing Rate

Gulf system Total Territorial Supply (TS) on January 24, 2003 and price tier in effect:

TS Pricebetween 5 a.m. and 6 a.m. 2309 mW mediumbetween 6 a.m. and 7 a.m. 2500 mW highbetween 7 a.m. and 8 a.m. 2497 mW Criticalbetween 8 a.m. and 9 a.m. 2414 mW Criticalbetween 9 a.m. and 10 a.m. 2293 mW high

Note two conclusions:1st • the peak occurred between 6a.m. and 7a.m. If not for the RSVP rate and Good Cents Select, the peak would have occurred between 7a.m. and 8a.m. That is the peak hour was shifted.

2nd • the magnitude of the peak (2500mW) was 7mW less than it otherwise would have been without the variable pricing rate. That is, in the absence of the RSVP rate and Good Cents Select equipment, the peak would have been 2497mW + 10.3mW = 2507mW.

GoodCents Select GoodCents Select –– Questions AnsweredQuestions Answered

�� AEM will provide customers with value.AEM will provide customers with value.

•Greater Control

•Better Information

•Bill Savings

“A significantly high percentage of participant customers are very

satisfied. . .”Value of Saved Energy (1,433 kWh) = $100Rate Savings due to Timing of Consumption = $87Total Annual Savings = $187

Average Annual Bill w/o AEM = $1254Average Annual Bill with AEM = $1067

Percentage Bill Savings = 14.9%

GoodCents Select GoodCents Select –– Questions AnsweredQuestions Answered�� AEM provides other benefits too.AEM provides other benefits too.

–– Customer Choice Not Utility ControlCustomer Choice Not Utility Control�� Enhances Customer SatisfactionEnhances Customer Satisfaction�� Reduces Policing Requirements vs. Direct Load Reduces Policing Requirements vs. Direct Load

ControlControl�� Produces Reliable Peak Demand ReductionsProduces Reliable Peak Demand Reductions

–– Requires No Utility Paid IncentiveRequires No Utility Paid Incentive�� Customers Save by Acting and ReactingCustomers Save by Acting and Reacting�� Customers Unwilling to Change Will Not ParticipateCustomers Unwilling to Change Will Not Participate

–– AEM is EquitableAEM is Equitable�� Heaviest Electricity Users are the Target MarketHeaviest Electricity Users are the Target Market�� Capacity Savings Benefit All UsersCapacity Savings Benefit All Users

–– Customers Prefer AEMCustomers Prefer AEM�� Focus Groups Results ProveFocus Groups Results Prove

GoodCents Select GoodCents Select –– Program EconomicsProgram Economics

�� Subscribing customers will pay to Subscribing customers will pay to participate!participate!

–– Customers Choose ResponsesCustomers Choose Responses��Respond to both price & lifestyleRespond to both price & lifestyle

–– Programmed Responses Programmed Responses -- Automatic Automatic –– Override => Customer ControlOverride => Customer Control–– Customers connected for valueCustomers connected for value--added added

servicesservices–– Bill Savings PotentialBill Savings Potential

��CustomerCustomer--controlled savings controlled savings


�� Significant RealSignificant Real--Time Demand Reduction!Time Demand Reduction!–– Over 2 kW per subscriber per critical eventOver 2 kW per subscriber per critical event–– ≈≈ 100 event100 event--hours per year is O.K.hours per year is O.K.

��Event durations of 1 to 3 hoursEvent durations of 1 to 3 hours

–– These demand responses are These demand responses are exactlyexactly like like quickly dispatchable capacityquickly dispatchable capacity�� CTsCTs or Houror Hour--Ahead Spot Market PurchasesAhead Spot Market Purchases�� 80 MW of available critical peak demand response 80 MW of available critical peak demand response

will displace the need for an 80 MW bank of will displace the need for an 80 MW bank of CTsCTs or or the need for 80 MW of hour ahead capacity the need for 80 MW of hour ahead capacity purchasespurchases

–– What is your avoided cost of peaking What is your avoided cost of peaking capacity?capacity?


�� Load reshaping can be profit preservingLoad reshaping can be profit preserving–– Moving consumption from higher to Moving consumption from higher to

lower priced periods reduces revenues lower priced periods reduces revenues and reduces costs but profits can be and reduces costs but profits can be preservedpreserved

�� Program facilitates the promotion of the Program facilitates the promotion of the most economically efficient electric most economically efficient electric endend--use loads and technologiesuse loads and technologies–– Off peak endOff peak end--uses of electricity become uses of electricity become

relatively more economic relatively more economic –– sales can sales can increaseincrease


�� Utility’s ViewpointUtility’s Viewpoint––If the present value of the If the present value of the

subscriber revenue plus the subscriber revenue plus the present value of the avoided present value of the avoided capacity requirements exceed the capacity requirements exceed the present value of present value of allall program program costs, the utility should offer the costs, the utility should offer the program.program.


�� Participant’s ViewpointParticipant’s Viewpoint–– If the aggregated benefits a prospective If the aggregated benefits a prospective

participant expects to receive from GoodCents participant expects to receive from GoodCents Select exceeds her outSelect exceeds her out--ofof--pocket costs to pocket costs to participate, she’ll subscribe.participate, she’ll subscribe.�� Opportunities for bill savingsOpportunities for bill savings�� Enhanced sense of control over electricity & homeEnhanced sense of control over electricity & home�� Enhanced sense of contributing to reliable power Enhanced sense of contributing to reliable power

supplysupply�� Enhanced sense of contributing to a better Enhanced sense of contributing to a better

environmentenvironment�� The net benefits of the available value added services The net benefits of the available value added services

through GoodCents Selectthrough GoodCents Select

GoodCents® SELECT

The Primary Mo tivat o rs

GoodCents® SELECT

GoodCents® SELECTQuestions or Additional Information

Contact:

� Brian White � (850) 444-6438

� [email protected]

Gulf Power

One Energy Place

Pensacola, FL 32520-0231

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