Summer’s in full swing and for most utilities across the country, so is the peak season for Demand Response events. Demand Response (DR) programs are becoming an increasingly popular tool used by utilities to mediate the strain on the energy grid caused by high demand during extreme weather conditions.
For years utilities have negotiated with larger customers to reduce energy strain on the energy grid, but as the Environmental Defense Fund points out, 60% of peak energy is used by smaller, residential customers. Utilities across the country are responding to this realization with the rapid expansion of residential DR programs. A 2015 study published by Navigant predicts DR capacity to reach 39 GW globally in 2016 and 144 GW by 2025.
Savings, Stability, Satisfaction
Whether through time-based rates or load control programs, by encouraging customers to proactively save energy during peak demand times, utilities are meaningfully reducing the load on their grids, avoiding grid instability and avoiding the high costs associated with expansion and grid maintenance. At the same time, they’re giving customers greater control over their energy usage and savings.
Through leveraging a combination of behavior change and technology-based strategies, one of Simple Energy’s partner utilities saw customers save $1.25 million on their electric bills in 2015, with load reductions ranging from 10 to 31 percent (0.12 to 0.56 kW) during the DR events we administered. The program reported a 98 percent retention rate and 72 percent customer satisfaction rating, with the average customer seeing bill savings of $109 from January through September 2015.
The Art of DR Management
While the payoff of effective DR initiatives can be sizable for all utilities, so too, can be the challenge of administering a successful and persistent DR program. From enrollment to customer communication, to data gathering and reporting, DR programs involve a lot of moving parts (which is why many utilities have found it beneficial to outsource aspects of these programs to partners such as Simple Energy). Here are a few best practices to consider as you tee up for savings this season:
Getting the word out and convincing customers to participate in DR programs, and the associated events, can be a challenge. To incentivize participation, Simple Energy incorporates targeted, personalized marketing and education into our behavioral energy-efficiency communications and online engagement platform. Our DR series informs customers about events, impacts, rewards and prizes while urging them to take actions that benefit them – and the utility – during DR events.
DR Event Alerts
The fast turnaround of determining a DR event and properly notifying customers is also an obstacle. Simple Energy notifies customers about events at the right time via their preferred mode of communication. We offer email, automated phone calls and SMS text alerts, allowing end customers to select the message or combination of messages that are right for them. Giving customers choices increases satisfaction and lowers attrition.
A timely, satisfying feedback loop is an important part of keeping customers happy and engaged. Simple Energy provides DR event performance results on the website and in push communications so customers know how much energy they saved and what rewards they’ve earned. This reinforces good behavior and motivates customers who are falling behind to up their game.
During periods of consistent hot weather, customer fatigue with frequent and even back-to-back DR events can result in disengagement and can negatively impact savings results over time. Having observed and analyzed these trends, Simple Energy and its partners worked together to implement strategies to avoid and overcome fatigue. These strategies include varied messages and frequency, added incentives and fresh visualizations of DR tips and results.
Building on strong results and lessons learned in past years, Simple Energy is voraciously adding to its arsenal of DR tactics as we head into the hottest days of 2016. We’re excited to see which ones prove most effective this year and look forward to sharing those results with you later in the season. For now, we wish all of our utility friends out there a successful DR season.