Post on 13-Jan-2016
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Consumer Questions Regarding the “Smart Grid”:
• Which technology components can be cost effectively
deployed to help residential customers save money
and reduce electricity use
• What are the best means to promote conservation and
change consumption patterns (in California)
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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The Punch Line:
Some smart grid components are valuable, but
spending billions to send price signals to
residential customers may not be the best way
to address residential energy use.
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Is the Smart Grid a Wise Choice for Consumers?
• What are the goals of the SG?
• How does the smart grid achieve these goals?
• Is it the most effective and efficient way to
achieve these goals?
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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What is the Smart Grid?
• Transmission-level equipment
• Substation and distribution equipment
• Mass market interval meters and communications
• In-home display and automation on customer side of meter
AMI component of most interest to consumer advocates
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Common Goals of the residential meter component of SG:
• Change in residential energy use
– DR (load shifting) through price signals [and automation?]
– Energy use reduction through consumer awareness of energy prices [and
automation?]
• System benefits
– Meter reading cost savings
– Reliability and outage detection benefits
– Integration of renewables through utility control of load
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Less Common Goals of the residential component of SG:
• Cost allocation – price discrimination by load shape
• Operational ‘services’ - prepayment plans, automatic shutoff
• Promoting retail choice through access to meter data
• Another communications gateway to the customer
• Capital additions to rate base in restructured market
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Consumer concerns:
• The “less common” goals all raise significant
consumer protection and equity issues! Are
they the real drivers of AMI??
• Does dynamic pricing solve cross-subsidies or
create inequities?
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Residential energy use – the competing perspectives
• Perspective 1: Seeing the actual time-varying price of electricity
best way to raise consumer awareness and change electric
consumption habits. Spend money on meters and two-way
communications to achieve environmental goals.
• Perspective 2: Consumer awareness and consumption habits
best influenced by public education and other policies. Use
money for efficiency and renewables.
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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• The truth lies in between. Consumers respond
to price signals but also to appeals to civic
duty.
• Consumer advocates want to maximize return
for ratepayer dollar and use cheaper methods
when available.
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Change in residential energy use: the SG hype
• Large reduction in total residential energy use due to change in
consumer behavior when exposed to price signal feedback
• Will result in the fully automated home that self-responds to price
signals based on customer choices
• Large residential demand response (load shifting) due to price
• Results in reduction in emissions
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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DR and residential energy use: One thing we should know
• Load shifting on ‘critical days’ does little or nothing to reduce GHG or toxic
emissions
– Too few hours to matter (6 hours * 15 days = 90 hours)
– Actual emissions change depends on generation resource mix between peakers,
intermediate and baseload plants
• In California little net impact (gas on margin), though load shifting due to ‘critical
prices’ on ‘critical days’ may slightly reduce toxic emissions during summer
afternoons
• Only sustained total reduction in energy use reduce net GHG emissions
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Change in residential energy use: Other things we know
• Limited demand elasticities of 0.05-0.3
• Reductions of 5-15% based on peak prices multiples higher than
average price (ie. 100% to 500% of off-peak price)
• Higher DR due to automation
• Consumer response to education, public appeals and feedback
• Not clear DR technology relevant for EE in residential market
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Change in residential energy use: what are we talking about
• Variable speed equipment – refrigerator, air conditioner, pool
pump
• Discretionary appliance load – dishwasher, dryer, washing
machine, pool pumps
• Efficiency choices – lights, consumer electronics
• Synergies between DR and EE much lower for residential market
(for example, no dimmable ballasts, no EMS, complicated HVAC)
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Other Policy Methods of Influencing Consumer Behavior
• PR, PSAs and continuing message from high level officials
• ISO emergency PSAs
• ‘Competition/Shaming’ policies (i.e. SMUD)
• Long-term education (recycling bins)
• School education
• On-bill financing
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Dynamic Pricing
• Pro – see real cost, change behavior, eliminate
subsidy
• Con – cost to implement, relative benefit
compared to inverted tiers, TOU, averaging rates
a valid goal for rate design
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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The Art of Interpretation: PG&E’s SmartRate - Viewpoint 1
• 7.5% opt-in, including 56% CARE customers
• Average load reduction 11% CARE, 22% non-CARE
• Incremental price of 60 cents/kWh
A resounding success. Lots of DR and great
participation.
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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The Art of Interpretation: PG&E’s SmartRate - Viewpoint 2
• Bill protection and $50 gift for early sign-up.
• 23% increased use. 2.5% missing values. 80% notification.
• Air conditioner saturation: 92% non-CARE, 71% CARE
• Rate differentials between 4:1 and 12:1.
Why did 92.5% turn down free money? Very low elasticity. What
will happen to the non-AC population? Is a 16% reduction worth
the cost, bill impacts, and other impacts of 8760 data points?
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
Brief Anatomy of a Greenwash Campaign
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Anatomy of a Greenwash Campaign
1995-97 Direct Access Working Group (DAWG) discussions regarding
competitive universal meter deployment
D.97-05-039 Competitive metering
2002 California Consumer Empowerment Association (eMeter, ABBG, Echelon,
Siemens) files PTM to force universal meter deployment by IOUs
Sep. 2003 Peevey ACR proposes analysis framework for AMI
July 2004 Peevey ACR ordering the filing of AMI proposals by December
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Anatomy of a Greenwash Campaign? Demand Response and Advanced Metering Coalition (Cellnet,
Comverge, Echelon, eMeter, EnerNOC, Itron, Hunt, etc.)
2004 Creation of the U.S. Demand Response Coordinating Committee
(utilities!)
2005 Lots of national meetings about smart metering and demand response
2008 DRAM changes names to Demand Response and Smart Grid Coalition
? Smart Grid = Green Grid
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?
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Thank you for listening!
Feel free to contact us.
Marcel Hawiger, Staff Attorney
The Utility Reform Network
711 Van Ness Avenue, Suite 350
San Francisco, CA 94102
415-929-8876 marcel@turn.org
PANC Seminar, May 4, 2009
The Smart Grid or the Smart Consumer?