A consultant filed a report concerning National Grid's Smart Energy Solutions (SES) pilot in Massachusetts, which defaulted (on an opt-out basis) non-shopping customers to various dynamic pricing default service generation rates

The SES program included two rate designs:

1) a TOU supply rate combined with Critical Peak Pricing (CPP)

2) a peak-time rebate (PTR) program for customers who would receive the standard basic service rate

Customers were also provided various enabling technologies

The consultant reported key findings from the pilot as follows:

• Load reductions up to 31% (0.60 kW) during conservation day peak events depending on the combination of rate and technology

• 4.7% (approximately 29 kWh per month) weighted average energy savings across the technology groups for active critical peak pricing (CPP) customers over the 4 years of the pilot

• Customers with smart thermostats had the highest load reductions (18%-31% on CPP and 1 0%-27% on peak time rebate, or PTR)

• Customers with in-home displays (IHDs) were next (11%-18% on CPP and 0%-9% on PTR), followed by customers with only web portal access (8%-15% on CPP and 6%-11% on PTR)

• Average per-customer bill savings of $347 total over the 4 years of the pilot for all customers on CPP

• Average total rebates of $4 7 for conservation day peak events across all summers for all customers on PTR

• 98% retention rate of customers in the pilot at the end of 2018 after rates went live on January 1, 2015

• The majority of customers who opted out did so early on, with retention dropping just 0.4% from the end of 2015 to the end of 2018

The consultant reported that, "For the CPP rate, average per-customer bill savings over the 4 years of the pilot were $786 for Level 2, $546 for active customers in Level 1, $336 for Level 4, $296 for Level 3, and $266 for passive customers in Level 1. For most groups, bill savings were highest in 2015 and 2017 despite energy savings being the highest in 2016. Increases in energy savings do not necessarily produce increases in bill savings because of the high prices during peak events. For example, the highest energy savings occurred in July 2016, but that month did not produce high bill savings because National Grid called 11 peak events, increasing bills in that month for many customers."

The consultant reported that, "PTR customers averaged approximately $47 in total bill rebates over the 4 years of the pilot. Level 4 customers achieved the highest average rebate of $1.23 per event, active Level 1 customers averaged $0.66 per event, Level 2 customers averaged $0.62 per event, and passive Level 1 customers averaged $0.51 per event. Across the 4 years, PTR rebates were highest for most groups in 2018 because that year had the most events. However, Level 4 customers had the highest bill rebates in 2015, driven by the high thermostat setbacks that year."

The consultant reported additional findings, including the following:

SES shows the strength of opt-out design.

• The program enrolled approximately 12,000 participants, which is more than could have been recruited in an opt-in design.

• The retention rate after 4 years was 98%, which is higher than many comparable opt-in programs.

It is important to choose the default price plan and technology level in an opt-out program carefully

• SES defaulted customers to the CPP rate and web portal, with no additional in-home technology

• Approximately 91% of customers were still on the default price plan and 91% at the default technology level after the 4 years of the pilot.

• Although satisfaction was strong, default bias is likely to be a factor in customers staying on the default enrollment options in the opt-out design.

Long peak events and peak events called on consecutive days did not significantly affect savings or satisfaction.

• Despite calling more peak events (including on consecutive days) and longer peak events than similar programs, SES achieved similar satisfaction and savings.

• However, some customers did express a desire for shorter events ending earlier in the evening.

IHDs increased demand savings, but much of the total demand savings were achieved with just a web portal.

• Customers with in-home devices had significantly higher demand savings (up to 31%) than those without any technology (up to 15%).

• Customers without technology who visited the program web portal saved at least twice as much in each year as those who did not visit the web portal. This may be attributable to differences in motivation as well as to the web portal itself.

• Customers without technology made up approximately 90% of the participants in the pilot and approximately 55% of the total peak event savings.

• Customers with IHDs saved the most energy (up to 8.1%), followed by those with web portal access only (up to 6.4%). Those with smart thermostats had higher demand savings but lower energy savings.

Customers on the CPP rate saved more than those on the PTR rate.

• At each technology level, active customers on the CPP rate saved more than those on the PTR rate.

• Passive customers saved more on the PTR rate in 3 of the 4 years, but that could be due to a slightly higher level of engagement since they had to opt in to the PTR rate.

• The motivations to save during peak events on the CPP rate are greater than for the PTR rate, as customers face higher summer bills if they do not save on the CPP rate.

The PTR rate may be more appropriate than the CPP rate for those on fixed budgets or with health issues.

• Although the CPP rate saves money over the course of the year, bills do increase for many customers in the summer, potentially making the PTR rate a better choice for customers on a fixed or limited income.

• For those who have a limited ability to reduce their energy usage (because of elderly, ill, or limited mobility household members, pets who need cooler temperatures, electric medical equipment, etc.), the PTR rate may be more appropriate.

Information needs to be provided multiple times via multiple channels.

• Despite a plethora of communication from National Grid, half of customers without technology (i.e., IHD and/or PCT) did not know it was available, and of the 40% who knew it was available, many did not understand the benefits.

• Additionally, many customers (56%) did not realize they had the option to switch price plans.

• Based on focus groups conducted in the first and second years of the pilot, low income customers had low awareness of the rates and technology adoption despite the high potential benefits to this group.

Customers want options to personalize Conservation Day notifications.

• Customers cited issues with the amount and methods of Conservation Day notifications in 2015 and responded well to additional promotion and simplified personalization options in 2016. Surveys were not conducted in 2017 or 2018.

See the report here

Tags:
National Grid   Innovation   Dynamic Pricing   TOU   Default Service   Smart Energy   Massachusetts  

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