Customers and Communities

Demand Response



Amount of power generation capacity avoided in 2012 due to customer participation in PG&E’s demand response programs

Providing reliable electricity is both a priority for PG&E and an expectation of our customers. However, when demand for electricity is high (such as during hot summer days) or supply is short (such as during periodic power plant or transmission line repairs and maintenance), it can increase the risk of power interruptions for homes and businesses.

PG&E’s demand response programs reward customers with incentives for reducing or shifting their energy use on days when demand for energy is highest, helping to reduce stress on the system and ensure adequate supplies of power. Hundreds of thousands of PG&E’s residential customers take part, along with many larger commercial and industrial customers. These programs enable PG&E to take a more fiscally and environmentally responsible approach by avoiding the need to build and maintain additional power plants that would only be called on for relatively few hours during the year.

Program Results

Overall, customer participation in PG&E’s demand response programs avoided the purchase of 638 MW of power generation capacity in 2012.

These programs range from SmartAC™, which cycles residential air conditioning units on and off, to fully automated programs that reduce energy use through an electronic signal, to emergency programs where large industrial customers voluntarily reduce their electricity demand in less than an hour upon request.

Transitioning to Time-Varying Pricing

California businesses are moving to a new electric rate structure called Time-Varying Pricing, as part of a statewide energy plan being implemented at the direction of the CPUC. Time Varying Pricing plans are supported by SmartMeter™ technology and are designed to help better align the price for energy with the cost of energy at the time it is produced. Rates are higher at times of increased demand and lower during off peak times. This “time” component provides customers with even greater control over their energy costs.

Peak Day Pricing

Peak Day Pricing and other Time-Varying Pricing programs are designed to better align the price for energy with the cost of energy at the time it is produced.

  • Time-of-Use is a Time-Varying Pricing program offered by PG&E in which rates are higher during weekday afternoons when electric demand is at its peak (typically May through October from noon to 6 pm). In return, customers pay lower rates at all other times.
  • Peak Day Pricing is a Time-Varying Pricing program that combines a Time-of-Use rate with Peak Day Pricing Event Day surcharges and summer credits. Customers who can conserve electricity during high demand hours and Peak Day Pricing event hours can save money on their overall electric bills.

Large commercial and industrial customers began transitioning to voluntary Peak Day Pricing in 2010, followed by large agricultural customers in 2011. Eligible small and medium business customers began transitioning to mandatory Time-of-Use rates in late 2012, followed by eligible small and medium agricultural customers in early 2013. Eligible small and medium business customers will transition to voluntary Peak Day Pricing starting in November 2014.

PG&E provides online tools, programs and services to help businesses succeed with Time-Varying Pricing. Customers can log into our website to see a custom rate comparison and learn more about the pricing options available to them.

Residential customers can voluntarily sign up for the SmartRate™ Summer Pricing Plan, an option enabled by SmartMeter™ technology that helps customers better control and reduce energy costs. Similar to Peak Day Pricing, the SmartRate™ Summer Pricing Plan helps residential customers save money by conserving power during up to 15 SmartDays™ each summer, when energy may be in short supply.

Innovating with Automated Demand Response

PG&E’s Automated Demand Response program, or “AutoDR,” enables customers to automatically reduce their energy use when they receive an electronic signal from PG&E.

Data center

Researchers have shown that software, sensors and other tools can cut energy consumption of data centers, like this one owned by PG&E, when peak demand is taxing the grid.

PG&E and customers work together to identify specific ways—such as turning off lights or air conditioners—to reduce or even eliminate customer electricity use during peak demand periods. Customers then receive funds from PG&E to automate their equipment or energy management and control systems. During a demand response event, PG&E sends a signal via the internet to the customer’s AutoDR-enabled equipment or energy control system, which initiates a series of customer-defined, pre-programmed and pre-authorized demand reduction strategies. These events usually occur during hot, summer weekdays.

Since 2005, PG&E has successfully demonstrated the program with a small group of customers and continues to provide substantial funding to support broader customer adoption of this promising concept.

One emerging area of focus is reducing demand at data centers—the energy-intensive computer farms with round-the-clock operational requirements. In 2012, PG&E partnered with the California Energy Commission and San Diego Gas and Electric to fund research by Lawrence Berkeley National Laboratory (LBNL) on whether data centers can reliably shave demand during peak hours. LBNL found promising opportunities for reducing energy loads from servers and storage devices, and from site infrastructure with minimal or no impact to operations.

On the Horizon

Looking forward, PG&E will continue to help realize the demand response potential of California by offering new programs and technologies that enable customers to better control their energy use and reduce their environmental footprint.

As an example, we will continue to transform our programs to provide more flexibility and resources to electricity system operators. We bid one of our demand response programs into the electricity market in 2012. PG&E is also developing new demand response programs that will help ensure reliability as more intermittent renewable energy sources are integrated into the grid.

We also will continue to focus on better integrating how we develop and market our demand response programs, moving toward assessing a customer’s overall energy demand and finding the best combination of energy efficiency, demand response and other programs to meet their needs.