PG&E Corporate Responsibility and Sustainability Report 2017

Demand Response

PG&E’s demand response programs enable customers to shift or reduce energy use during periods of peak demand, adding stability to the electric system. By giving customers incentives to cut usage, demand response programs provide valuable services for the grid, lower costs for customers and help reduce greenhouse gas emissions.

Our Approach

PG&E’s demand response options are powered SmartMeter™ technology, which 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 on days when demand is highest, 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 more than 200,000 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 2016, 145,000 customers participated in SmartRate and provided an average load reduction of nearly 30 MW per event day.
SmartAC Allows PG&E to send a signal to a PG&E-provided device on a customer’s air conditioner, cycling the air conditioner to use less energy. The program is offered May through October. Its 150,000 participants can provide about 80 MW of load reduction when needed.
SmartRate + SmartAC Automatically cycles the air conditioning systems of participating customers during SmartDay events by controlling their SmartAC devices, helping customers avoid higher SmartDay prices. Approximately 32,000 customers were enrolled in both SmartRate and SmartAC in 2016.
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, to discourage energy usage on those days. In 2016, more than 210,000 customers participated in Peak Day Pricing. The retention rate over the full season was nearly 90 percent.
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 usage 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 in response to requests from PG&E, which helps ensure grid reliability.
Automated Demand Response (AutoDR) Provides customers with funding for equipment that—after receiving a signal from PG&E—initiates a series of automatic, customer-defined and pre-authorized demand reduction measures during demand response events.
Permanent Load Shift Uses thermal energy storage to help permanently shift a customer’s peak electric load to a part of the day when energy prices are lower.

2016 Milestones

In 2016, we leveraged our programs on numerous occasions to reduce demand and ensure reliable electric service for customers.

We continued to provide online tools, programs and services to help businesses thrive with critical peak pricing, and we launched new pilots to test novel ways for customers to participate in demand response. For example, customers can see a custom rate comparison and learn more about available pricing options on our website.

Our supply-side pilot program—which allows participants to define when, how much and at what price they are willing to reduce their energy load—continued for a second year. This pilot differs from traditional demand response programs, where PG&E signals when to reduce electricity use. Participants in the pilot received a monthly payment and also earned 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.

In addition, we launched our excess supply pilot, which is meant to help balance fluctuations of power supply created by renewable power generation. This pilot allows residential owners of batteries, fleets of electric vehicles and other technologies to absorb excess energy when power supplies from solar and wind temporarily exceeds demand. We are also working to add non-residential participants to the program.

Measuring Progress

Through our demand response programs, PG&E and our customers had the ability to provide up to 525 MW of load reduction in 2016—about the capacity of a large conventional power plant. This includes 17 MW from the first year of the Demand Response Auction Mechanism pilot, which enables California’s investor-owned energy companies to purchase the ability to activate demand response actions from third parties via a competitive auction.

Looking Ahead

PG&E will continue to explore and offer new data platforms and programs that enable our customers to better manage their energy use, and we will partner with third parties to deliver innovative products and services that help ensure the reliability of the energy grid.