Direct Load Control (DLC) Program Benchmarks

www.esource.com

Hot or Not

DLC Program Benchmarks: How Do

You Compare?

Jonathan Nelson

Research Analyst, E Source

Advanced Load Control Alliance-Spring 2012

Meeting

Thursday, April 5th, 2012

www.esource.com || © 2012 E Source

Agenda

Overview and Preface

DLC Survey Results and Analysis

Musings on the Future of DLC

2

www.esource.com || © 2012 E Source 3

Who is E Source

Mission Statement: To advance the efficient and

environmentally sound use and provision of energy.

Membership-based energy advisory service

Utilities are our focus

Unbiased research and analysis

Fuel-neutral

Product-neutral

Vendor-neutral

Program-neutral


2011 Heat Wave Rolls Across the U.S.

Source: National Oceanic and Atmospheric Administration


RTO

Peak demand

(MW) Date

MISO 103,975 July 20, 2011

PJM 158,450 July 21, 2011

ERCOT 68,379 August 3, 2011

Background: 2011 Regional Demand

Records

© E Source; data from ERCOT, MISO, PJM

July New electricity demand records:

ERCOT, MISO, and PJM

Economic and emergency DR events

initiated in Mid-Atlantic (e.g. BGE)

NYISO and ISO-NE just barely missed

their records.

August Lingering heat in southern states

ERCOT sets another record

Two DR events on the shoulders of the

month (August 4 and 24)

Dallas news headline: ERCOT warns

of ‘high probability’ of rolling blackouts

as heat wave strains power grid


DLC Member Inquiries

What kind of baselines

are used in direct-load

control programs?

What vendors deliver and

manage DLC programs?

What’s the mix between 1-way

and 2-way communicating

technologies for DLC?

What kind of incentives do

utilities give to customers

participating in DLC programs?

What are typical participation

rates for DLC programs?

Can you provide attrition rates

from other DLC programs?

What roles do enabling

technology and utility DLC

programs play in dynamic

pricing?

What are some typical figures

for load per customer in other

utility DLC programs?


2012 DLC Benchmarking Effort

Industry-wide

benchmarking analysis of

DLC programs

Source to inform utilities on

trends in technology, DLC

program design and

performance

Current sample includes data

from 23 utilities

Data includes:

Participation

Load impacts

Incentives

Technologies

Vendors


Participation

Source: E Source

3,800

7,100

11,199

25,500

27,600

32,000

32,177

35,146

37,000

41,433

46,400

48,000

51,000

63,129

71,000

73,000

104,921

123,000

138,700

149,000

164,950

375,000

819,500

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

Roseville Electric - City of Roseville

Hoosier Energy

KCP&L-Greater Missouri Operations

Wisconsin Public Service

Vectren Energy

SMECO

PNM

Dominion

Idaho Power

KCP&L

Dakota Electric Association

Alliant Energy

Duke Energy (IN)

MidAmerican Energy

Progress Energy Carolinas

Commonwealth Edison

Rocky Mountain Power

Duke Energy (NC)

Louisville Gas and Electric

Xcel Energy (CO)

Pacific Gas and Electric

Xcel Energy (MN)

Florida Power and Light

Current Total Participants

Current Total Participants (Res and SB)


Participation Rates

Source: E Source

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

Pa

rtic

ipa

tio

n R

ate

To

tal R

es

ide

nti

al C

usto

me

rs

Residential Participation Rates

Total Residential Customers Residential Participation Rate


Participation Rates

Source: E Source

Xcel Energy (MN)

PNM Pacific Gas and Electric



Vectren Energy

Dakota Electric

Association

Eligible SB Customers 200,000 49,437 450,000 100,000 330,000 20,000 5,000

SB Participation Rate 7% 6% 1% 5% 6% 3% 28%

0%

5%

10%

15%

20%

25%

30%

0

100,000

200,000

300,000

400,000

500,000

Part

icip

ati

on

Rate

Elig

ible

Sm

all B

usin

ess C

usto

mers

Small Business Participation Rates


Participation Rates by Program Age

Source: E Source

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

5

10

15

20

25

30

Part

icip

ati

on

Rate

Pro

gra

m A

ge

Residential Participation vs. Program Age

Program Age (years) Residential Participation Rate Linear (Residential Participation Rate)


Incentives

Source: E Source

Non-Cash Incentive 9%

Yearly incentive 39%

Monthly Bill Credit 39%

One-time Enrollment Incentive

9%

Monthly Bill Discount 4%

Distribution of Incentive Methods

n = 23


Does Incentive Type Impact Participation

Rates?

Utility Incentive Type Residential

Participation Rate

Louisville Gas and Electric monthly bill credit 17.4% Idaho Power monthly bill credit 9.4%

Commonwealth Edison monthly bill credit 2.1% Alliant Energy monthly bill credit 11.8%

Hoosier Energy monthly bill credit 2.6% Vectren Energy monthly bill credit 21.1%

Dakota Electric Association monthly bill credit 48.0% Duke Energy (NC) monthly bill credit 7.8%

Wisconsin Public Service monthly bill credit 6.7% Xcel Energy (MN) monthly bill discount 33.2%

KCP&L no cash incentives 9.2% KCP&L-Greater Missouri Operations no cash incentives 4.1%

Pacific Gas and Electric onetime enrollment incentive 3.5% Duke Energy (IN) onetime enrollment incentive 7.5% Xcel Energy (CO) yearly 12.9%

Rocky Mountain Power yearly 14.9% PNM yearly 6.5%

Progress Energy Carolinas yearly 6.6% Florida Power and Light yearly 20.0%

Dominion yearly 1.7% Roseville Electric yearly 8.1%

MidAmerican Energy yearly 11.5% SMECO yearly 23.5%

Source: E Source


Do Incentives Impact Participation?

Source: E Source

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

$0

$10

$20

$30

$40

$50

$60

Com

monw

ealth E

dis

on

Louis

vill

e G

as a

nd E

lectr

ic

Vectr

en E

nerg

y

Idaho P

ow

er

Alli

ant

Energ

y

Duke E

nerg

y (N

C)

Hoosie

r E

nerg

y

Wis

consin

Public

Serv

ice

Dakota

Ele

ctr

ic A

ssocia

tion

Rosevill

e E

lectr

ic -

City o

f R

osevill

e

Rocky M

ounta

in P

ow

er

Flo

rida P

ow

er

and L

ight

PN

M

Pro

gre

ss E

nerg

y C

aro

linas

Mid

Am

erican E

nerg

y

Dom

inio

n

Xcel E

nerg

y (C

O)

SM

EC

O

Monthly Bill Credit Yearly Incentive

Pen

etr

ati

on

Rate

Incentive amount probably doesn't matter so much!

Incentive Amount Residential Participation Rate (entire territory)


Participation Rates

Take Away: One size doesn’t fit all

Program participation rates depend on various factors

that are defined by individual utility needs and strategic

planning


Load Impacts: Overall Program

Source: E Source

4

9

11

25

32

35

36

36

37

39

47

67

90

112

138

150

152

175

395

999

0 200 400 600 800 1000

Roseville Electric

Hoosier Energy

KCP&L-Greater Missouri …

Vectren Energy

Wisconsin Public Service

Dominion

KCP&L

Alliant Energy

SMECO

PNM

Idaho Power

MidAmerican Energy

Progress Energy Carolinas

Commonwealth Edison

Pacific Gas and Electric

Xcel Energy (CO)


Duke Energy (NC)

Xcel Energy (MN)


MW Controlled

Total Available Capacity (MW)


Load Impacts: kW per Participant

Source: E Source

1.11

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

kW

Co

ntr

olle

d

Utility

kW Controlled/Program Participant

kW per Participant Average


Marketing DLC Programs

Basic is the mainstay

Direct-mail and email are the most cost-effective

Nearly as effective as traditional options (TV, print, radio,

telemarketing)

Value Propositions that Motivate Customers

Cash

Convenience

Ease of participation

Serving the collective good

Segmentation Matters

Different customer segments are motivated by different

messages Source: E Source


Marketing and New Participants

Source: E Source

Alliant Energy

Roseville

Electric

Commonwealth Edison

MidAmerican

Energy

Florida Power

and Light

SMECO Idaho Power

Louisville Gas and

Electric

Pacific Gas and

Electric

Dominion

Xcel Energy (CO)

Progress

Energy Carolina

s

Marketing Spending Last Year $15,000 $17,000 $30,000 $36,202 $43,916 $66,000 $184,680 $762,000 $1,319,4 $1,320,0 $1,770,0 $1,800,0

New Participants 1,200 300 5,000 574 8,163 13,312 6,156 20,140 17,057 24,890 19,000 32,000

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

Ne

w P

art

icip

an

ts

Ma

rke

tin

g S

pe

nd

ing

Marketing Spending & New Participants


DLC Vendors

Source: E Source

*Some programs use more than one

Technology Vendor Utilities Using Vendor*

Cooper 13

Comverge 9

Honeywell 3

Aclara 3

Entek 1

Gridpoint 1

Tantalus 1


How Advanced Are They?

Utility Real-time participation

verification? Web-enabled remote

programming of devices? KCP&L no yes

KCP&L-Greater Missouri Operations no yes Xcel Energy (CO) no no Xcel Energy (MN) no no

Rocky Mountain Power no no PNM no no

Progress Energy Carolinas no no Pacific Gas and Electric no yes

Louisville Gas and Electric no no Idaho Power no no

Florida Power and Light yes, via power-line carrier no Dominion no no

Commonwealth Edison yes, via customer's meter yes Alliant Energy no no

Hoosier Energy yes, via power-line carrier no Roseville Electric no no Vectren Energy no no

Dakota Electric Association no no Duke Energy (NC) no no

MidAmerican Energy no no Duke Energy (IN) no no

Wisconsin Public Service no no SMECO no no

Source: E Source


What About Dynamic Pricing?

Source: E Source

Utility Customers can participate in

dynamic pricing?

What kind of dynamic pricing

program?

KCP&L yes TOU

KCP&L-Greater Missouri Operations yes TOU

Pacific Gas and Electric yes CPP, PTR

Commonwealth Edison yes HP

www.esource.com || © 2012 E Source

Musings On The Future of DLC

23


Where Do We Go From Here?

Most programs are still legacy programs

Old technology + limited functionality = limited options

New opportunities for DLC

FERC Order 745: DR can compete with supply side

resources in electricity markets – PJM first to comply

(4/2/2012)

Ancillary Services: Non-Spinning and Spinning Reserves,

Frequency Regulation (FERC Order 755)

Requires more advanced programs and technology

Rather than just shaving the peaks, DLC can be a robust

tool to meet routine demand needs.

What needs to happen to get us there?

http://www.marketwatch.com/story/pjm-implements-changes-in-compensation-for-demand-response-2012-04-02


For More Information

Jonathan Nelson

Research Analyst, Research, E Source

303-345-9164 [email protected]

Have a question? Ask our experts: www.esource.com/question

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Direct Load Control (DLC) Program Benchmarks