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Smart grid technologies push growth of CPP and other innovative rate programs for residential customers, says new Chartwell report
ATLANTA – Oct. 5, 2009 – The increased market penetration of smart metering technologies and other factors will lead to substantial growth in critical peak pricing(CPP) offerings for residential customers, new Chartwell research reveals.
Chartwell found that less than 5% of utilities currently have a full-blown critical peak pricing offering, but nearly 20% are piloting such a rate or plan to roll out a CPP rate within a year. Many other utilities are considering a CPP rate within the next two years, according to data in Chartwell’s latest report, Residential Rates to Encourage DSM. The report includes Chartwell data and analysis on time-of-use(TOU) pricing, real-time pricing, discounted rates for participating in energy efficiency or demand response programs, and other rates designed to encourage energy savings or demand response among residential customers.
Although some of these rate programs do not rely on smart meter technology, several utilities have included rate programs in their smart meter business cases. With many utilities only one to three years from deploying a smart metering infrastructure, a growing number will be looking at offering special rates like CPP.
CPP rates are similar to time-of-use rates with an additional time period – a critical peak – that imposes a significantly higher price per kWh. That time period is not pre-set, but instead triggered under certain conditions, such as when system reliability is compromised or supply prices are very high.
The key to the success of CPP rates, which are designed to flatten peaks in demand, is to integrate participants’ HVAC systems into the program so they will respond automatically when a critical peak pricing period is in effect, the Chartwell report says. Almost a third (31%) of utilities with CPP programs or pilots said their customers’ thermostats or HVAC systems were set up to respond automatically to pricing signals, according to Residential Rates to Encourage DSM.
The 67-page report includes an examination of data from a Chartwell survey of 84 utilities; analysis of industry trends and best practices in special rate offerings; and eight in-depth case studies focusing on success stories from Pacific Gas & Electric, Tampa Electric, Public Service Electric & Gas, and others.
Residential Rates to Encourage DSM is available from Chartwell for $995 and is part of Chartwell’s Products, Services & Programs Research Series, which reports on energy efficiency, demand response and other marketing and communication issues. A free table of contents is available on Chartwell’s EnergyLibrary at www.energylibrary.com.
ABOUT CHARTWELL INC.
Chartwell is a specialized information provider that facilitates knowledge exchange among utility professionals responsible for management practices and technology solutions. Chartwell publishes best practices case studies, quantitative research and electronic newsletters, and hosts conferences and other events for utility professionals.
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