Chris King
Chief Strategy Officer, eMeter
Chair, SVLG Demand Response Subcommittee
July 21, 2006

Who’s eMeter?
Company Background & Qualifications
•
Founded in Silicon Valley in 1999 by original executive group from CellNet
– Team pioneered advanced metering infrastructure technology
•
Develop and sell Advanced Meter Information Systems (AMIS) software
1. Advanced Metering Business Process Management (BPM)
2. Meter Data Management
3. AMI Integration Platform
•
Experience in all aspects of AMI implementation
– AMI technologies,
– Software implementation,
– Data collection and management,
– Deployment & operations,
– Business and regulatory strategy
Business Focus
•
Software & professional services
•
Strategic consulting on AMI issues
© eMeter Corporation 2006 2

Why is Demand Response Important?
Price-based
•
Tool for customers to manage bills
•
Keeps wholesale prices in check
Reliability
•
Protects the grid
•
Prevents rolling blackouts
Case Study 1: Loss of 1,000 MW Power Plant
More Generation Down,
System re-SCRAM
Restoration
Suspended
Generator Down,
Emergency Control
(SCRAM)
Generator Restoration
Started
Restoration
Started
© eMeter Corporation 2006 3

Main Job of Customers is Not Energy
Source: Primen
© eMeter Corporation 2006 4

Even Facility Managers Spend Little Time on Energy
Source: Primen
© eMeter Corporation 2006 5

Customers & Utilities Don’t Speak the Same Language
Source: Primen
© eMeter Corporation 2006 6

Primary Customer Energy Concerns
Source: Primen
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Tools That Help With Pricing
Source: Primen
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Market Research – Commercial Customer Concerns
Statements regarding energy efficiency investments
Source: Quantum Research
© eMeter Corporation 2006 9

Commercial Pricing Preferences
Source: NYSERDA
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What is DR: Price-Based vs. Reliability Programs
Price-based
•
Goal is to provide price signal
•
Demand reductions occur via voluntary end-use customer response
•
Reductions are included in load forecasts
•
Response levels become more predictable as a function of:
–Transparency/foreknowledge of prices
–Weather
–Experience
–Diversity (number and types of customers)
Examples: critical peak pricing, real-time pricing
© eMeter Corporation 2006 11

What is DR: Price-Based vs. Reliability Programs
Emergency/reliability
• Goal is “load acting as a resource”
•
Demand reductions occur via dispatch by system operators
•
Reductions are included in resource/supply portfolio
–Same as a power plant (with limitations)
•
Response levels more variable
–Minimal foreknowledge by end-use customers
–Dispatch reasons varied
–Less diversity in loads involved
Examples: interruptible programs or demand bidding programs with penalties
© eMeter Corporation 2006 12

Customer-Friendly Demand Response
Principles developed by SLVG (subset)
•
Voluntary
–Default programs must have no penalty for “opting-out”
–PUC ruling on critical peak pricing for large commercial customers adopted SVLG’s principle
•
Easy to participate
–Minimize complex forms and procedures
–Avoid specific peak reduction targets (e.g. minimum of 100 kilowatts)
•
Easy to understand
–Maintain stable programs over time
•
Easy to reduce demand
–Promote availability of automation technology through incentives and rebates
•
Good value
–Customers should be fairly rewarded for their efforts
–The benefits should be maximized relative to the cost
© eMeter Corporation 2006 13

Case Study 2: CPUC Ruling on Critical Peak Pricing
Decision in spring 2006
Requires utilities to implement “default” critical peak pricing for customers above 200 kW
•
Decision does not say when
• Decision says the rate design will be covered in a “future” rate case
–Unlikely to see anything before the summer of 2008
Customer-friendly features
•
Promoted by SVLG in the proceeding
•
Adopted in decision
Key customer protections
•
CPP is to be voluntary, meaning customers can opt-out with zero penalty to their current time-of-use rate
•
Opting out must be very easy – no more than a phone call or email
•
Customers have bill protection for their first year
–Can pay no more on the CPP price than the TOU
•
Customers must be fully informed as to the likely bill effects
© eMeter Corporation 2006 14

Critical Peak Pricing: What is it?
$0.60
$0.50
$0.40
Critical Peak
(12-6 pm)
Critical Peak
Notification to
Customer
(by 5 p.m.)
$0.30
Peak
(12-6 pm)
$0.20
$0.10
Off-Peak
$-
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
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Case Study 3: Two-Part Real-Time Pricing
Georgia Power Company
Very high participation
•
1,700 customers (80% of those eligible)
•
> 5,000 MW peak load; 500 to 1,000 MW peak reduction
•
Voluntary
•
Day-ahead (75%) and hour-ahead (25%) hourly pricing
•
Prices based on wholesale market with adjustments
Features
•
Customer pays for baseline level of usage at standard tariff prices
•
Deviations from baseline – increases or decreases – billed at RTP price
© eMeter Corporation 2006 16

kW
Two-part RTP Example
Customer
“sells” load at high RTP prices
Customer “buys” load at low RTP prices
Baseline
Actual load
1
Source: Christensen Associates
© eMeter Corporation 2006
Hour of Day
24
17

Load Response, by Price Day-type
1.20
16
Reference Load
14
1.10
12
Load at moderate prices
1.00
Load at highest prices
0.90
Highest prices
0.80
Moderate prices
0.70
Reference prices
0.60
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
Source: Christensen Associates
0
© eMeter Corporation 2006
2
4
6
8
10
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Price Elasticities:
Elasticity is the amount load is reduced when the on-peak price is doubled
0.500
0.450
0.400
0.350
0.300
0.250
0.200
0.150
0.100
0.050
0.000
Source: Christensen Associates
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Price Response Curve
Utility able to predict response accurately based on price level, using historical data
35%
30%
25%
20%
15%
10%
5%
© eMeter Corporation 2006
0%
$0 $1,000 $2,000
Source: Christensen Associates
$3,000
$/MWh
$4,000 $5,000 $6,000
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Case Study 4: Anaheim Peak Time Rebate
Program concept
•
Identify critical peak days a day in advance based on forecast high temperatures in Anaheim
•
Notify customers a day in advance via automated telephone and, if desired, email
•
Customers reduce consumption between noon and 6 p.m. on critical peak days
•
Reduction is recorded via hourly meters and the data sent back after midnight
•
Customers receive a rebate of $0.35 per kWh for each kWh below their
“baseline” usage on the event day (what they normally would have used from noon to 6 p.m.)
Program benefits
•
Provide customers with choices
–Realize bill savings by curtailing peak demand during the top 50 to 100 hours per year (“critical” peaks)
•
Reduce utility cost to serve
–Lower peak capacity needs in the long run once programs are in place, tested, and shown to deliver reliable load reductions
© eMeter Corporation 2006 21

Peak-Time Rebate
Establish customer baseline
•
Three highest of previous 10 non-event weekdays
Rebate is reduction times the price (30 cents per kWh rebate)
No risk to customer
No need to meet specific reduction targets
Peak reduction
Peak hours
1
© eMeter Corporation 2006
12
Hour of Day
24
22

Program Operations
Experimental sample provided with meters
•
Sample designed by Professor Frank Wolak of Stanford University
Recruitment
•
Recruitment via direct mail
•
No incentive payment
Customer education
•
Customers sent fact sheets and a refrigerator magnet
•
Webpage added to anaheim.net with FAQs and other info
•
Customer service via 800 number and email enabled
Events
•
12 events in 2005
•
Included both days when California grid had problems
Results
•
13% peak reduction – same as reduction measured in critical peak price program
•
SDG&E has proposed rolling this out to all of its small business and residential customers
© eMeter Corporation 2006 23

Case Study 5: Auto-DR
Nationwide test by Lawrence Berkeley National Labs
Automated response to hourly prices
•
Prices published on server
•
Customer systems grab prices automatically
•
Energy management system controls load in response to prices
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Auto DR Results
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Auto DR Results: Office Buildings
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Customer Shed Strategies
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Conclusions
Demand response and energy information are of interest to a subset of businesses
•
For whom controlling energy costs is a major concern
•
Who are provided with tools to manage energy costs
Some good success stories
Customer-friendly demand response programs are:
•
Simple
•
Easy to participate in
•
Are supported by automation tools and automated response
•
Have risks that are known and easily managed
•
Stable over time
•
Offer good value for customer efforts
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