California’s statewide pricing pilot: Lessons learned


Conference: Smart Metering West Coast 2006
Location: San Fransisco
Presenter: David Hungerford
Abstract: Presented by David Hungerford at Smart Metering West Coast 2006. In 2002, Energy Policymakers in California set a goal to increase economic demand response capability by 5% of annual system peak load for the investor-owned utilities by Summer 2007.  A major element of the strategy to achieve that goal was to facilitate participation by all customers through the installation of an advanced metering infrastructure.   The three investor-owned utilities—Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—In order to estimate the demand response potential from small and medium (below 200kW) customers as part of their AMI business case development, joined with the California Public Utilities Commission and the California Energy Commission to conduct a $20 million statewide experiment that became known as the Statewide Pricing Pilot (SPP).  More than 2500 advanced meters were installed on a representative sample of residential and small commercial customers from across the states various climate zones.    Data were collected beginning with the summer of 2003 through the Winter of 2005.  Sub-samples of customers were given different critical peak and time-of-use rate “treatments”.  Sub-samples of customers were also evaluated to examine how a variety information, education, and enabling technology treatments affected load impacts.  In addition, a number of different studies were conducted to better understand response behavior and customer preferences.

The SPP results were thoroughly evaluated and vetted before utility, consumer and intervenor groups. The results  present a clear and compelling story:  (1) residential and small commercial customers respond significantly to dynamic prices;  (2) Enabling automation technologies significantly increase the potential load reductions (3) most customers used the dynamic rates to  lower their monthly bills; (4) customers overwhelmingly prefer dynamic rates to their current rates, whether or not they saved money; and (5) a significant majority of participants believe such rates should be made available to all customers.  .

This presentation will provide an overview of the SPP research and results.