Demand Response Programs
Don Stanczak
Vice President, Regulatory Affairs
August 6, 2014
DTE Electric’s demand response programs provide
significant economic benefits to customers
• DTE Electric’s commitment to demand response began in the 1960’s with controlled water heating
rates
• The Company began one of the largest and most successful interruptible air conditioning (IAC)
programs in the country during the 1980s – currently about 280,000 customers participate
• Demand response offerings enhance the customer experience
– DTE Electric customers utilizing demand response rates express higher customer satisfaction
with their electric service than customers without demand response rates
– Customers on demand response rates feel more engaged and in control of their energy
usage as well as their overall electric costs
• DTE Electric’s peak demand reduction capability, of almost 700 MWs, is equivalent to a moderately
sized base load electric generating plant
• DTE Electric is able to reduce costs for its customers through demand response
– Short run – Replaces capacity purchases and lowers Power Supply Cost Recovery costs
– Long run – Reduces peak loads and delays need for new generation
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The focus on demand response is timely given the
projected 2016 MISO reserve margin shortfall
The projected reserve margin shortfall
highlights the need to:
•
•
Review how scarce generation
resources will be rationed going
forward
Revisit the status and structure
of demand response programs
and interruptible retail rates
Source: MISO 2016 Resource Adequacy Forecast – June 5, 2014
2016 MISO Resource Adequacy
Zone 7 - Michigan
(GW)
Reserves
3
2
Demand
22
23
Resource
Requirement
Resources
Reserve
Shortfall
2
DTE Electric could potentially achieve over 850
MW in MISO demand reduction capacity credits
under current programs
DTE Electric Demand Response Programs1
(MW)
Dispatchable Demand
Reductions
(MISO Capacity Credit)
Other Demand
Reductions
(No MISO credit)
354
100
Potential
Existing
222
181
25
75
254
156
147
84
76
19
Interruptable Interruptable Interruptable Electric Heat Interruptable
Supply
Air
Service
Service
(Industrial) (Residential) (Industrial)
(Commercial)
100
12
Other
Energy
Dynamic
Optimization Peak Pricing
Programs2
1. Total MISO Qualified Resource for 2014
2. The Energy Optimization program’s peak demand savings reduce the Company’s peak load purchase requirement but are not dispatchable
3. DTE has several time of use rates including a pilot Electric Vehicle rate
Time of
Use Rates3
3
Continued AMI infrastructure investment over the
next 8 years will allow for further demand response
programs
DTE Energy AMI Installation
(000’s)
1,488
740
727
552
287
135
2008-2013
2014
2015
AMI Electric
2016
AMI Gas
2017
2018-2022
AMR Gas
4
Preliminary results indicate that Dynamic Peak
Pricing drives lower average load during peak
hours of the day
Dynamic Peak Pricing Pilot
2013 Event Days
3.5
3.0
Average Load (kW)
2.5
2.0
1.5
1.0
0.5
0.0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the day
Standard Pricing
DPP Pricing*
* DPP customers with in-home display and programmable thermostat (currently less than 400 customers)
5
Key takeaways
• DTE Electric has offered a variety of active and passive demand response programs for all major
rate classes for over 40 years
• Increased attention on demand response in Michigan is appropriate given the projected MISO
reserve margin shortfall in 2016
• Effective demand response programs benefit DTE Electric and its customers by improving
customer satisfaction and lowering costs
• DTE Electric is actively exploring the feasibility of expanding some existing demand response
programs as well as exploring new program opportunities
• AMI/Smart Grid investment is integral to DTE Energy’s demand response programs
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Appendix
7
SmartCurrents: Smart Home Pilot Recruiting
Process
Mailed ~140,000 letter invitations
Followed up with
Postcard and Phone Calls
Direct Mail
Letter
Post Card
16,584 Responded
Phone
Call
6,794 Qualified (750 Placed in
Control Group)
1,483 Completed enrollment
Treatment Cell/Offer
T1 -- DPP/Education
T2 -- DPP/Energy Display/Education
T3 -- DPP/Prog. Comm. T'stat/Education
T4 -- DPP/Energy Display/T'stat/Education
S1 -- T4 + Smart Kitchen
S2 -- T4 + Smart Laundry
S3 -- T4 + Smart Kitchen & Laundry
Total Enrollment
Initial Current
274
254
402
398
340
335
398
394
23
22
32
29
14
14
1483 1443
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Experimental Dynamic Peak Pricing (DPP) Rate
All SmartCurrents participants are on the DPP rate*
All participants were randomly selected and had to opt-into the pilot.
* Rates shown are Energy Supply only. Service Charge, Distribution, Surcharges and Taxes are not included.
** Critical peak is limited to 20 times per year at 4 hours duration (or 80 hours per year), with prior day notice.
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