SMUD’s dynamic pricing pilot showing results


Sacramento, CA, U.S.A. — (METERING.COM) — July 15, 2013 – In the final stretch of a two-summer pilot, the Sacramento Municipal Utility District (SMUD) Smart Pricing Options dynamic rates pilot is being received well by participating customers and is showing positive results for the utility in terms of reducing load, the utility has reported.

To encourage customers to conserve during peak periods, special time-based prices were designed that provide a clear high price signal during summer peak periods and reward customers by reducing prices during non-peak periods.

The experimental pricing is in effect June through September 2012 and 2013. The pilot includes seven treatment groups, and three control groups of residential customers. Rate offers are combined with feedback tools and educational materials.

The Smart Pricing Options pilot was developed alongside the SmartSacramento initiative with SMUD’s $127.5 million U.S. Department of Energy (DOE) ARRA Smart Grid Investment Grant funding. SmartSacramento utilizes a large suite of programs based on two-way digital interaction, which enables SMUD to set retail prices closer to the cost of delivering energy based on time of use and other factors.

The objective of the Smart Pricing Options pilot is to study customers’ adoption and success with three different dynamic rates. Some customers were put on the rate by default while others were proactively recruited. SMUD expected to recruit 7,800 customers for the time-based rates and successfully recruited more than 8,800 customers in just seven months. The pilot set out to achieve an ambitious goal of 15 percent enrollment for the voluntary rates and exceeded the goal with close to 20 percent acceptance. Of those put on the rate by default, only 10 percent opted out. Of those who opted to enroll, fewer than two percent chose to leave the selected rate over the summer of 2012.

Among the results to date each of the pricing plans has shown load reductions ranging from six percent to 26 percent during peak hours. Among the highest impacts are from the Critical Peak Pricing (CPP) treatment groups, where CPP events are called on a maximum of 12 days throughout the summer. On these days, customers are asked to reduce their usage between 4-7 p.m. For the voluntary group of CPP customers, load reductions were as high as 22 to 26 percent.

Another benchmark is high in-home-display (IHD) connection rates. The offers that utilize IHDs that communicate with smart meters have seen initial connection rates from 40 to 60 percent. This is attributed to extensive equipment testing, collaboration on firmware updates with our supplier, proactive pairing of the devices to the meters, and follow up calls assisting customers with issues.

SMUD’s more than 620,000 smart meter rollout began in late 2009 and was completed in April 2012.