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HomeMy WebLinkAbout20031202DRAM Comments.pdff~ECEIVED 0FILED 2003 DEC -2 PH 3: 00 I Pc ()f). - / d- iU i 'JuLICDE MAN D RES P 0 N SJ=TltlfTiIWlY(j.fjM1gPlCNQE T E R IN G Co a irian O. BOX 33957 WASHINGTON , DC 20033 phone (202) 441.1410 VIA EMAIL December 1 , 2003 Dave Schunke Section Supervisor Idaho Public Utilities Commission Re: Idaho Power Company Advanced Metering Program Dear Mr. Schunke In response to your request, the Demand Response and Advanced Metering Coalition ("DRAM") is pleased to provide comments on the advanced metering pilot now under development in Idaho. These comments are a distillation of lessons learned in recent activity in California, as well as the very rich and broad academic literature. Our members have had extensive experience with numerous advanced metering and demand response programs , including dynamic pricing, and have been very active in California s Statewide Pricing Pilot via an organization in which many of our members also participate, the California Consumer Empowerment Alliance ("CCEA" We offer these observations: 1. First and foremost, keep it simple. Many programs are very complex, with numerous experimental treatments. It's important to remember that this is human behavioral research in the real world with numerous confounding variables. The simpler the better, and more friendly to customers the better. 2. Focus on the areas of greatest value. The paramount benefits of advanced metering are in utility operational benefits, led by remote meter reading, and in dynamic pricing focused on the top 100 hours of the year. Figure 1 of the attachment is a load duration curve showing how demand response in just these hours can reduce the need for total generating by up to 25% (!). That's because the 25% of the generating capacity is needed to serve the extra load , higher line losses, and greater reserves associated with these 100 hours. While the curve is for California, Idaho s should be very similar. 3. Keeping 1 and 2 in mind , include a simple critical peak pricing program in Idaho advanced metering pilot with the following features: a. Sample size that allows for statistically significant results that can be projected to the population as a whole. This could be as few as a couple of hundred customers. b. Focus on assessing total peak reduction for the population. Avoid attempting to measure reductions associated with specific types of customers (e.g. high usage vs. low usage, customers with and without air conditioning). While such comparisons are tempting, they will greatly complicate Phase One , and sufficient academic literature - literally hundreds of programs and analyses - is available to enhance the results if necessary to consider specific policy options. c. Provide a simple, customer friendly rate that combines features of other successful programs, as follows (please note that these are examples of features that have been successful for others and that the process should remain flexible so Idaho can develop a program specific to its own needs ): i. Rate during all but the 100 critical peak hours remains as it is today ii. The critical peak hours are set for noon to 6 p.m. on 16 days per year. The fixed time period makes it easy for customers to remember. iii. The critical peak days will be dispatched based on forecast wholesale energy prices, targeting the most expensive days of the year. High temperatures can be used as a proxy for wholesale energy prices if necessary. iv. On critical peak days , customers will receive a 50% rebate if they reduce their consumption during the critical peak hours by 10% compared to their average consumption during the critical peak hours. The rebate is calculated on the bill for the critical peak hours only, so rebate amounts are quite small , even though 50% sounds large. (It is important that customers understand that, even though individual savings are likely to be small, overall ratepayer savings will be in the millions of dollars, and there are environmental benefits as well. It's very much like recycling in that the financial benefits are small individually, but the societal benefits are substantial.) v. Customers will be notified the day before critical peak days , so they can plan ahead if desired (note that their bill remains exactly the same if they do nothing; the 20/20 discount amount is designed to approximate wholesale energy purchase savings). Notification in the pilot would be via an automated phone call or email at the customer s preference. Notification in a large-scale program would be via mass media, such as newspaper and radio announcements. vi. Calculate and bill the customers manually in Phase One in a customer-friendly, graphical format that allows customers to understand how they reduced critical peak usage. d. Compare the critical peak usage of the participants with non-participants to estimate the total peak reduction (see Figure 3). 4. Appropriate baseline data can be obtained if the advanced metering system is deployed by June of 2004. It is anticipated that Phase I will encompass the towns of Emmett and McCall (approximately 25 000 residences). Upon issuance by the Commission in the near term of an Order approving Idaho Power implementation plan , IP can in turn have contracts executed with the AMR vendor and the meter vendor(s), products ordered, and an adequate and appropriate deployment schedule for those areas created. This will enable IP to begin acquiring baseline data for the summer of 2004 that can be used to analyze a dynamic pricing pilot to be operated in the summer of 2005. This will also allow IP time to create any necessary CIS changes in the event they determine that an automated billing process is possible (but see, 3., above). Perhaps, most importantly, however, it will allow the overall schedule set by the Commission for activity during 2004 and 2005 to be met. Although this Phase I deployment is to further the goal of measuring the biggest value items (see 2., above) it should be noted that it may also allow other benefits to be immediately realized - such as better customer service, improved distribution engineering, et cetera. We appreciate the opportunity to comment and would be pleased to answer any questions or otherwise assist with Idaho s advanced metering pilot. Sincerely, Isl CHRIS KING Chris King Acting Chair Demand Response and Advanced Metering Coalition cc:President Paul Kjellander, I PUC Commissioner Dennis Hansen , IPUC Commissioner Marsha Smith, IPUC Maggie Brilz, Idaho Power Company One quarter of capacity used less than 100 hours per year - 40000 3(j()(Xj .l!.- 2(100(1 Attachment Figure 1 - Load Duration Curve for California P\a1qnitng tWier..... Maruin: $4. U2 ftfW &1O!W Sj'JiMil'llJ RotCNO Rcquit(.~ SUIU MW Peak Coman.:!: 52. 00& t/.W 50000 1~~r!kiJ~D~~s(~a!b~1if!!I~4M2~~. - . - . - . . - . " - . " " , . - . " - . . " . . . . 5% of Ttno Demond orcatcrUllln 42.313MW \1% QfI((l'IId')ftt'llJfnt!.groborlhan 39,244 MW ----~-_. ----..-----.----- .----. ------ ._-------_.~--.. "'-"-- -.".......-. .........-......-.. toO!W -- - -.---- ----- -~---- --.--- ---_Ow ------ .-----------. Numbcr~fifouns t 501 1001 1501 2001 2&:01 3001 3SfJ1 40:21 4GOt !;()O1 SSG! 6001 MO1 1001 1501 eoO! &501 SaulteR: C3firOffl lit EMrO'1l Commission. CatilOmia 1$0 Reouirt!ment!t Sample ~w~ ttJ., ~2~ M~in St. Account Number I\BO.12344567 24 hr Customer Service 800~ABC-5000 50/10 earns 50% rebale when yoo reduce usage by 10% from noon.6 p.m. during Super Peak events. The rebate !s caculated on yoor usage during these six hoofs. June 14, 2003 Noon t06 p. June 15,2003 Noon to 6 p. June 29, 2003 Noon to 6 p. Suoer Peak Hours From 1100n to 6 p.m. during critical system oondlUcms. Customers are notified by 5 m. the day prior to the . event. Reaular Hours All other weekday hours AU day on weekends Figure 2 - Sample Bill Summary SUPE:R PEAK REBATE SUMMARY Your Super Peak 20/20 Target is 20'%, less usage than your average usage on weekdays ~tween noon and 6 p. f)i~Y~P9t $Ol~g g~b~ 8 SUper Peak Target 6/3/03 to 7/2/03 10 kWh . SUper Peak Day 6/27/03 11 kWh super Peak Day 6/28/03 7 kWh Super Peak ,Day 6/29/03 7 kWh $0. $0. $0. Your Daily Peak Usage .1ft 4 . :2 ' ~O T$fgt!Su~ Ptik 61'27100 $UjJtf?~k &1aiO-3 Super Peak o"29.'~ Congratulations! You earned SOl10 rebates on two of three Super Peak days. 'MIlle individual savings may be small, aU consumers together be.neftl sIgnificantly by oo~ing fewer peaker power plants aoo having reduce(J air poUulion emissions. Thank you for yoor participation" 1.4 J. 1.2 ~ 0. ~0. ~ 0.4 ~ 0. Figure 3 - Sample Critical Peak Rate Response from California Statewide Pricing Pilot Data for July and August 2003 A\entge Hniy FlErgy tie By Ture Period An-Zore A\ernge For (PP-F ilitoJ:re~ OJ. (PP Th)S ..................... . t- .. .. ....... .... ... ....... .... ........u......... 4 5 7 8 9 ronunWBMTI~~Wlin~~ Ihr -Treatnut ....... CoItrol Source: Joint Utilities Monthly Report to California Public Utilities Commission November 15, 2003.