PG&E Corporate Responsibility and Sustainability Report 2020

Plan of Reorganization Commitments

Demand Response

PG&E’s demand response programs enable customers to reduce energy use during periods of peak demand, providing a way for them to save or even earn money by adjusting their usage. By giving customers incentives to curtail usage, demand response programs provide grid stability, lower costs for customers and achieve greenhouse gas emissions reductions.

Our Approach

PG&E’s demand response options are supported by 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.

More than 170,000 residential customers participate in the programs we offer, along with more than 120,000 larger commercial and industrial customers. Programs for homes and businesses include:

Program Description 2019 Results
SmartRate Gives residential customers a discounted rate throughout the summer, with the exception of 9 to 15 “SmartDays,” when their rates are higher because demand for electricity is high. Approximately 67,000 customers participated in SmartRate and provided an average load reduction of nearly 13 megawatts (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. Approximately 100,000 participants provided about 49 MW of potential load reduction, which was bid into the California Independent System Operator (CAISO) wholesale market as a Proxy Demand Resource but can also be called on for emergencies and near-emergency purposes by the CAISO or PG&E’s grid and system operators.
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” (9 to 15 per year) and times, to discourage energy usage on those days. More than 115,000 customers participated in Peak Day Pricing.
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. Approximately 700 active customers provided about 30 MW of potential load reduction, which was bid into the CAISO wholesale market as an economic Proxy Demand Resource between May and October.
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. PG&E attained a load reduction potential of about 310 MW, which was bid into the CAISO wholesale market Reliability Demand Response Resource product year-round to respond to grid emergencies.
Automated Demand Response (AutoDR) Provides rebates for residential demand-reducing smart thermostats and provides funding for demand-reducing equipment for non-residential customers where the equipment is capable of receiving a signal from PG&E to initiate a series of automatic, customer-defined and pre-authorized actions during demand response events. PG&E provided incentives to 14 customers totaling 2.6 MW of new load shed committed.

2019 Milestones

In 2019, we leveraged our programs on numerous occasions to reduce demand and ensure reliable electric service for customers.

This included a new option for our Capacity Bidding Program that ties demand response events directly to the price of energy in California’s wholesale energy market. Each aggregator in the program determines the price at which they are willing to have their customers participate in a demand response event, enabling aggregators to tailor offerings to their customers while also encouraging demand response to be used in a manner that can help alleviate high prices.

In addition, we deployed two-way communicating load control switches over the SmartMeter network. This approach ensures greater reliability in delivering on the energy forecast into the market and can provide near real-time visibility at the individual customer level.

Measuring Progress

Through our demand response programs, PG&E and our customers had the ability to provide up to 400 MW of load reduction in 2019—about the capacity of a large conventional power plant.