Demand Response
When demand for electricity is high, PG&E’s wide-ranging demand response programs help relieve pressure on the grid and save customers money with incentives to reduce their energy use or shift it to another time.
Our Approach
SmartMeter™ technology powers PG&E’s demand response options and helps customers better understand their energy usage and lower their energy costs. Our programs also help avoid the need for additional power plants that would only be called on for short periods throughout the year, allowing us to take a more sustainable approach to balancing energy supply and demand.
More than 250,000 residential customers participate in the programs we offer, along with many larger commercial and industrial customers. Programs for homes and businesses include:
| Program | Description |
|---|---|
| SmartRate | Gives residential customers a discounted rate throughout the summer, with the exception of nine to 15 “SmartDays,” when their rates are higher because demand for electricity is high. In 2015, 145,000 customers participated in SmartRate and provided an average load reduction of nearly 40 MW per event day. |
| SmartAC | Sends a signal to a PG&E-provided device on a customer’s air conditioner, cycling the air conditioner to use less energy. Offered during May through October, the program’s 150,000 participants can provide about 90 MW of load reduction across PG&E’s system when needed. |
| SmartRate + SmartAC | Roughly 35,000 customers were enrolled in both SmartRate and SmartAC in 2015. PG&E automatically cycles the air conditioning systems of these customers during SmartDay events by controlling their SmartAC devices, helping customers avoid higher SmartDay prices. |
| Peak Day Pricing | Provides non-residential customers with discounted rates from May through October. In exchange, prices are higher for energy used during designated peak “Event Days” (nine to 15 per year) and times. In 2015, over 150,000 customers participated in Peak Day Pricing for the first time. The retention rate over the full season was nearly 90 percent. |
| Aggregator Managed Portfolio and Capacity Bidding Program | Works with third-party demand response companies that aggregate customers. These aggregators—and, by extension, the customers in their portfolios—act as virtual power plants and receive payments from PG&E in exchange for reducing load on peak days. |
| Base Interruptible Program | Enables participating customers—typically large customers—to receive financial incentives in exchange for their commitment to reduce energy usage during emergencies to help ensure grid reliability. |
| Demand Bidding Program | Offers incentives to businesses for reducing energy usage during hot days. Unlike some other programs, this is a “best effort” program that gives customers incentives for reducing their usage but does not apply additional charges if they opt out on any given day. |
| Automated Demand Response (AutoDR) | Helps customers identify specific ways to reduce electricity use during peak demand periods and provides funding for equipment that—after receiving a signal from PG&E—initiates a series of automatic, customer-defined and pre-authorized demand reduction measures. |
2015 Milestones
In 2015, we leveraged our programs on numerous occasions to reduce demand and ensure reliable electric service for customers.
We continued to transition eligible small- and medium-sized agricultural customers to Peak Day Pricing rates during 2015, following the transition of similarly sized non-agricultural customers. Over 200,000 small- and medium-sized customers are now enrolled.
We also continued to provide online tools, programs and services to help businesses thrive with critical peak pricing. Customers can log in to our website to see a custom rate comparison and learn more about available pricing options.
In addition, we launched a supply-side pilot program that will continue through 2016 through which participants define when, how much and at what price they are willing to reduce their energy load. This differs from traditional demand response programs, where PG&E signals when to reduce electricity use.
Participants in the pilot receive a monthly payment and can also earn money by selling their electric demand reduction into California’s wholesale energy market. Using a variety of technologies—including energy storage; electric vehicles; heating, ventilation and air conditioning; and solar—participants delivered a total load reduction of about 1 MW. The pilot was recognized by DistribuTECH as one of the top utility demand response and energy efficiency projects for 2015.
Measuring Progress
Through our demand response programs, PG&E and our customers had the ability to provide up to 556 MW of load reduction in 2015—about the capacity of a large conventional power plant.
Looking Ahead
PG&E will continue to offer programs that enable our customers to shift energy usage when needed, helping to lower costs and benefit the environment. Through new data platforms, programs and pilots, we will continue to partner with third parties to deliver innovative products and services that help ensure the reliability of the energy grid.
For example, a new two-year demand response auction mechanism pilot enables California’s investor-owned utilities to procure demand response services from third parties via a competitive auction. These third parties offer innovative services and tools that incentivize customers to participate in programs that reduce energy usage.