DEMAND RESPONSE DESIGN AND STRATEGIC CONSULTING

Analysis of Demand Response Strategies and Scenarios
Large Eastern U.S. Utility

To help our client crystallize and optimize its position around how best to view demand response initiatives in a fluid regulatory environment, we developed a series of demand response scenarios covering the spectrum of how their market may evolve over 5-10 years. Having shared these materials, we then interviewed senior executives, identified future development scenarios for demand response programs and technologies, and crafted transitional, incremental approaches for their consideration. The goal of the project was to visualize how best to incrementally pursue the preferred scenario while best positioning the utility in the event that alternative scenarios of technological development, regulatory involvement, or corporate direction evolved.

Demand Response Program Process Evaluation – Utility Administration Study
National Grid USA, Northborough, MA

FSC’s Dan Engel managed a consultant team that performed a process evaluation of National Grid USA’s targeted implementation of Demand Response Program offerings designed to defer the need for specific capital T&D infrastructure investments. National Grid’s goal was to improve program participation by large commercial and industrial customers in the targeted constrained areas. Mr. Engel worked with the National Grid DR Program Manager to assess how the programs were being rolled out, what channels were being pursued to identify appropriate and high probability customers, what sales and marketing tools were being utilized by account managers in the local district offices, etc. The outcome of the process evaluation was a series of recommendations on improved and repetitive DR training to increase the account representatives’ comfort level in discussing program details, as well as the development of marketing tools that could promote more rigorous and routine DR program responsiveness by participating customers.

Demand Response Valuation – Phase I
Demand Response Research Center – Lawrence Berkeley National Laboratory

As part of a larger research team, FSC assisted in scoping out a robust demand response benefit-cost valuation framework tailored to California. FSC provided expertise in the valuation of reliability as well as participant benefits and costs. The research team’s initial analytical phase consisted of creating a topology of candidate benefit/cost methodologies, evaluating those methodologies, identifying alternative approaches for valuing demand response in California, and identifying key data gaps and other issues that require further research. The more detailed task of crafting a complete delineation of identified research gaps (as well as potential resolutions) was left for the second phase of the research.

PRICING PROGRAM DESIGN AND STRATEGIC CONSULTING

California Statewide Pricing Pilot
California Energy Commission, Working Group 3

FSC’s Dr. Stephen George was a key contributor to the design and evaluation of California’s Statewide Pricing Pilot, a joint venture between California’s three investor-owned utilities and two regulatory commissions designed to address the uncertainty regarding customer load impacts directly attributable to TOU and dynamic pricing strategies. This was acccomplished via a large-scale experiment to test the impact of time-of-use (TOU) and dynamic pricing among residential as well as small commercial and industrial (C&I) customers. The experiment’s primary objective was to estimate the average impact of time-varying rates on energy use by rate period, as well as explore the factors that contributed to variation in price responsiveness among customers. The analysis not only explored the average demand reduction, but calculated price and substitution elasticites that were embedded in models that can be used to predict impacts under alternative pricing designs and customer characteristics.

San Diego Gas & Electric
San Diego Gas and Electric

While at CRA international, and continuing after joining FSC, Dr. George provided analytical support and expert testimony to SDG&E in their regulatory proceeding on advanced metering and demand response. Dr. George was the lead witness for SDG&E on the demand response impacts of time-based pricing and incentive programs enabled by AMI. He provided written testimony in filings in October 2005 and in March, June and July 2006 and testified on behalf of SDG&E at oral hearings in October 2006. SDG&E is currently awaiting a ruling in this matter.

City of Anaheim Public Utility District’s Spare the Power Days pilot program
City of Anaheim Public Utility District

As input to his testimony for SDG&E in the company’s advanced metering and demand response filing, Dr. George estimated the impact of Anaheim Public Utility District’s Spare the Power Days pilot program. This innovative program paid customers 35 cents/kWh to reduce energy use during the peak period on critical days. SDG&E proposed a similar program as part of its advanced metering and demand response strategy. Dr. George first estimated the impact of the Anaheim incentive program pilot using a regression‑based methodology. He then compared the impact estimate (11.9 percent reduction) with one obtained using the energy demand models developed through California’s Statewide Pricing Pilot after adjusting for differences in air conditioning ownership and weather and the implicit price signal represented by the Anaheim rebate. The reduction estimated using the SPP models, 11.4 percent, was within one standard deviation of the Anaheim impact of 11.9 percent. Based on this analysis, Dr. George concluded that the SPP demand models could be used successfully to estimate impacts for SDG&E’s proposed Peak Time Rebate program, which was structurally similar to the Anaheim pilot program except that the SDG&E proposed incentives were higher than those used in the Anaheim pilot.

MARKET ASSESSMENT

Analysis of Direct Load Control Options
Pacific Gas and Electric Company, San Francisco, CA

In 2001, Dan Engel, while with a prior employer, managed an investigation of direct load control (DLC) options for Pacific Gas & Electric Company to help the utility comply with a state ruling regarding the implementation of DLC programs for the residential and small commercial markets. The project involved surveying the technologies associated with two common control methods—duty cycling and thermostat temperature reset—and considered the compatibility of certain end uses typically found within PG&E's residential and small commercial territories (air-conditioning, electric water heaters, pool pumps, and other motors). The work compared the costs and attributes of a selection of DLC products and vendors and aggregated information about a sampling of existing utility load control programs.

After evaluating the cost-effectiveness of 25 program design scenarios—which varied according to implementation strategy, load control technology, duty cycling parameters, and incentive levels—recommendations were provided regarding how best to proceed with an in-depth investigation of program options.

In 2004, PG&E asked that the study be updated. The team revisited the most likely candidate components of successful DLC and load management programs, compatible end uses, control strategies, communication options, and a sampling of equipment. In preparing the update, the focus shifted away from viewing DLC technologies as stand-alone options and toward more integrated/whole premises solutions. The additional value that the update provided resulted primarily from (1) an investigation of automated metering and its integration with load control programs and hardware and (2) a survey of a sample of programs offered by other utilities involving the cycling of air conditioners and other appliances. In the latter case, the team documented the programmatic specifics of these established DLC programs and an innovative price responsive program. The project's report provided an overview of the programs, their target markets, the hardware deployed, the size of the programs, and other features, as well as insights from the programs’ managers.

SIC Classification Validation Study
Pacific Gas and Electric Company, San Francisco, CA

U.S. Department of Commerce Standard Industrial Classification (SIC) codes were used by PG&E and CEC in forecasting future energy use by commercial businesses. The SIC codes for customer accounts were assigned by staff at PG&E based on published information and common sense when SIC information was not available in published sources. To determine the accuracy of the SIC codes assigned by PG&E, we surveyed a representative sample of commercial customers to collect detailed information required to assign them to SIC categories. The accuracy rate of PG&E’s classification was determined by comparing their results with those obtained in the survey. Detailed analyses of the extent and nature of observed classification errors were conducted. In addition to the validation study, we reviewed procedures used by PG&E to identify customer SIC codes and recommended changes to procedures designed to improve the accuracy of the resulting assignments.

Assembly Industries Survey
Pacific Gas and Electric Company, San Francisco, CA

California electric utilities are required to conduct energy use surveys of industrial customers every five years. To satisfy this requirement, we were retained by PG&E to conduct an in-depth study of energy using equipment for industrial customers in SIC Codes 35XX, 38XX and 3570 –the assembly industries. A complete census of the population of customers in these SIC codes were carried out. Facilities of the largest 127 customers in these SIC codes were visited by trained mechanical engineers who collected detailed information on mechanical systems, lighting systems, manufacturing processes, electro-technology usage, operating hours, facility size, production volumes and employment. The remaining 1,650 customers were surveyed by telephone. The results of the survey were summarized statistically and end‑use intensities were calculated for lighting, air conditioning and motor loads for assembly industry customers. The results were reported to PG&E and the CEC along with a digital database containing detailed results of measurements for each customer.

CUSTOMER SATISFACTION – TRANSACTION AND RELATIONSHIP

Energy $mart Thermostat^sm Program
Southern California Edison Company, Rosemead, CA

FSC was retained by Southern California Edison to assess satisfaction of its customers with its web-based enhancement to its Energy $mart Thermostat Program for small commercial customers.  The website provided information about the program and allowed customers to program their thermostat (or thermostats) with a user-friendly web-based interface.  To assess customer satisfaction, participants were surveyed.  Results were combined with exit-based data collection from website users.  The research was designed to test a marketing approach to bring program participants to the website and to measure user satisfaction with the website itself.  Customers reported a high level of satisfaction with the program and the website once they learned about its features.  A second wave of surveys tested whether multiple exposures to the marketing material would increase traffic to the site and encourage customers to increase the settings of their cooling system during hot summer months.  Results were reported to SCE and used to improve the performance of the web-based system.

Commercial/Industrial Customer Attitudes, Needs, and Opinion Surveys
Sacramento Municipal Utility District, Rates Department, Sacramento, CA

FSC was retained by SMUD to study a representative sample of commercial/industrial customers to identify their satisfaction with various services, their loyalty to SMUD and the conditions that would lead them to switch service providers in the event that alternative suppliers entered the market. The results were used by SMUD to guide decision-making in areas of resource and energy efficiency program planning.

Residential Customer Attitudes, Needs, and Opinion Survey
Sacramento Municipal Utility District, Rates Department, Sacramento, CA

FSC surveyed a representative sample of residential customers to measure their satisfaction with SMUD service and to obtain information about their willingness to pay for renewables, energy conservation programs and SMUD activities that stimulate the local economy. The survey also collected information about customers’ willingness to switch to alternative suppliers. We used a two-stage process to collect the information. The results of the survey were statistically summarized and reported to SMUD and used to guide decision-making in the areas of resource and energy efficiency program planning.