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In search of the perfect rate: Portland General tests 12 pilots on DR rate design

Published August 23, 2017

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From behavioral demand response to dynamic pricing, there are a lot of rate structures and programs utilities can adopt to send signals to customers to reduce their power usage. The key to success is in finding the right one.

Many utilities are experimenting with time-of-use (TOU) rates, and some have gone further. By 2019, all new residential customers in California will be enrolled by default into a TOU plan. Ontario and Italy have also made variable rates the default. Utilities across the nation are now using behavioral demand response programs as a low-cost way to manage the grid. Demand response programs that pay for load reductions have been around for decades.

So how do utilities decide what works best for them? At Portland General Electric, you test them — all of them.

PGE is now in the midst of an ambitious demand response project: to evaluate 12 rate structures that enable demand response. The utility is a dual-peaking power provider, and more than ever it is focused on price-based, non-firm resources. It already has a TOU rate, but could potentially replace it with one being tested now. But a dozen pilots?

Josh Keeling oversees PGE's smart grid customer analytics, and calls it " a real labor of love."

"It's a fairly complicated program that is a really critical part of our demand response portfolio going forward. We have a pretty diverse demand response portfolio and action plan over the next few years," he said.

PGE intends to quintuple its demand response resources in the coming years, a part of 77 MW of non-firm resources outlined in its integrated resource plan last year. So far, it has developed about 20% of that goal.

Keeling spoke about the pilot, and the utility's partnership with CLEAResult and AutoGrid, in a July Demand Repsonse Dialogue hosted by the Peak Load Management Alliance. And recently he connected with Utility Dive to talk about what is working for the Portland utility.

The utility is testing three TOU rates, peak time rebates, critical peak rebates, an opt-out behavioral demand response programs, opt-out peak time rebates, and a few combinations at different price levels. "Just from a logistics standpoint, it's complicated," Keeling said. Essentially, the utility is analyzing 12 randomized control trials to find what programs are most effective.

"We have a pretty diverse portfolio being proposed in the IRP and non-firm price-based resources are a pretty big part of that," he said. The utility's portfolio of demand response remains relatively small, with a focus on residential customers. There is some capacity from the small commercial and industrial space as well, but Keeling said that is an area where the utility would like to acquire more resources.

But for now, the 12 pilots are focused on residential customers, which means marketing has become one of the keys to success for PGE.

See article at Utility Dive

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