BGE pilots 'highly personalised' experiences for customers on TOU rates
Maryland utility Baltimore Gas and Electric (BGE) has run a two-year pilot demonstrating the potential of behavioural load-shaping communications alongside time-of-use (TOU) rates for customers, including those on low-to-moderate incomes who are traditionally hardest hit with such a tariff. Following an evaluation, the pilot is anticipated to transition into a full offering as an additional residential rate option for the utility’s more than 1.1 million electricity customers.
Smart meters as the utility gateway to the home have the potential to enable a host of new services for customers. One of the most fundamental but not yet widely deployed service is the opportunity for some form of time-related tariff that more closely reflects the supply demand requirements and the real time costs of that electricity.
A rate design initiative has been driven in Maryland in the US by the state regulator, the Maryland Public Service Commission, to investigate if time-varying distribution and retail rates could reduce peak demand and assist lower-income customers to manage the cost of their electricity service.
With a pilot developed in a collaborative stakeholder workgroup over a period approaching two years, as part of Maryland’s grid modernisation efforts in the spring of 2019, BGE and the state’s other utilities Delmarva Power and Pepco launched a new time-of-use- pilot rate.
The opt-in pilot introduced customers to dynamic rates with significant peak- to off-peak ratios, on the order of 5:1 – one of the highest ratios ever piloted. To help maximise customers’ performance on the rate and minimise the risk of high bills, the utilities also launched accompanying behavioural load-shaping communications and techniques.
For project support, BGE partnered with Oracle Utilities Opower, which provided its behavioural load shaping solution, and The Brattle Group, which assisted with designing the pilot structure and the evaluation of the results.
Opower’s solution includes weekly digital communications that help customers understand how their onand off-peak rates work. The content also continually evolves, including week-to-week spending comparisons, personalised information about on- and off-peak spending and AIpowered recommendations for shifting the customer’s largest energy loads.
Lynn Fiery, Rate Administration Manager at BGE, says that the determination of the TOU pilot design was a highly collaborative process including a wide variety of stakeholders. Issues that were considered included the size of the ratio of on-peak to off-peak rates; if and how to test low to moderate income customer response; what customer protection should be in place; and what, if any, enabling technologies should be included.
Through the workgroup process, the time variation for both generation/ transmission and distribution resulted in the high on-peak to off-peak ratio.
The pilot was designed to separately test the response to the rates for the two customer groups: those on low-to-moderate incomes and those not.
The final pilot design also included consumer protections like allowing the ability to opt out at any time and behavioural emails were selected as the single enabling technology.
Recruitment was undertaken through invitations to a random sample of eligible customers. The recruitment materials included an individualised bill impact analysis using the customer’s past 12 months of smart meter data under three load shifting scenarios – no load response, 5% shift to off-peak and 10% shift to off-peak.
Through these recruitment efforts, BGE successfully enrolled approximately 1,800 customers in the pilot rate and about 84% of them were also enrolled on the behavioural load shaping communications.
Fiery comments that there was some debate around the inclusion of behavioural load shaping in the pilot as its size and cost limitations prevented the use of a randomised control trial to differentiate the behavioural impacts from those of the rate.
“Ultimately, the decision was made to include the behavioural load shaping communications and the individualised bill impact analyses as both are key educational tools that could be especially helpful for the lower income customers – and that BGE would be interested in including both in a full rollout of the rate,” says Fiery.
Moreover, the Public Service Commission in its order approving the pilot acknowledged that behavioural load shaping is a means of helping customers manage risk associated with additional price exposure of TOU rates and that it is important to pursue innovative strategies.
Ultimately too, the decision proved a valid one, with the final pilot analysis from The Brattle Group indicating that the combined impact of the optimised rate and behavioural load shaping communications had been highly effective.
Some of the more compelling findings included:
• Across all customer types, summer peak demand was reduced 9.3%, non-summer peak demand was reduced 4.9% and monthly bills were reduced 5.3% to 6.3%.
• Low-to-moderate income customers are doing as well on the rate as all other customers in terms of peak reduction and bill savings, which is important considering that as a percentage of their household budgets. This also refutes the historical concern that TOU rates could is proportionately and negatively impact such customers if they are unable to shift their usage during peak times with a resultant high bill.
• Off-peak usage did not go up as expected from a shifting of load from the costly on-peak period.
• Even structural winners, i.e. those who could save on the TOU rate without changing their behaviour due to their existing consumption patterns, saved more than predicted, demonstrating that they took action to shift energy usage.
The pilot concluded after two years in April 2021 and the results are being evaluated by the stakeholder work group and the Public Service Commission before determining the next steps for the rate plan and if it should transition into a full offering.
In conclusion, Fiery says: “All customers on time of use rates with an email are eligible for behavioural load shaping communications regardless of homeownership status, age, income or other demographics. Moreover, behavioural load shaping can support both opt-in and opt-out TOU rate programme design.”