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California’s three major utilities – Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) – have proposed plans to move Californians to electricity prices that vary with the time of day. Time-of-use pricing, or TOU, is critical to aligning our energy use with times when clean, cheap electricity […]

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California’s “big three” utilities, at the behest of state regulators, are in the process of examining and improving how they price electricity, including something called time-of-use (TOU) electricity pricing. This option – which rewards people who shift some of their electricity use to times of day when clean energy is abundant and electricity is cheaper – […]

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By Jamie Fine

Here at Environmental Defense Fund (EDF), we love win-win solutions. This is why we’re big fans of time-of-use (TOU) electricity pricing (a type of time variant electricity pricing). As I’ve written before, TOU pricing better reflects the true cost of electricity, which fluctuates throughout the day. What’s more, it brings with it significant benefits for the environment, electric reliability, and people’s wallets. By empowering customers to better control their energy bills and reduce our reliance on fossil fuels, everyone wins with TOU pricing.

Thankfully, the California Public Utilities Commission (CPUC) included TOU pricing as one of the key elements in their plan to reform residential electricity rates. But how and what Californians pay for electricity – the best way to structure rates – is currently up for debate at the CPUC.

The Commission issued its proposed decision on restructuring California’s residential rates and moving customers to TOU rates, which EDF strongly supports as an evolutionary leap forward. Subsequently, Commissioner Mike Florio issued an alternate proposed decision that nudges the current tiered rate system forward with a time-variation “adder.” Unfortunately, Florio’s alternate proposal amounts to more of a tune-up than the substantial overhaul required to prepare for a future grid that runs on carbon-free renewables, like wind and solar, and also powers our cars, trucks, trains, and boats.

EDF and many other stakeholders – including utilities, consumer protection groups, distributed energy providers, and EDF’s sister environmental organizations – support a version of the original proposed decision because it more strongly assures that TOU rates will be used to their full potential. The CPUC will vote on which version to adopt later this month with the opportunity to issue changes based on either proposal.

Proposed decision vs. alternate proposed decision

The good news is, both the proposed decision and the alternate proposed decision direct California’s three investor owned utilities – Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SoCal Ed) – to develop TOU rates for widespread use, including transitioning some customers to TOU pricing automatically (a good thing, according to research on opt-in versus opt-out programs). If EDF’s recommendations are embraced, this will include technology enablement for those who need the most assistance in adjusting to time-variant pricing.

There are, however, a few substantial differences between the two proposed decisions:

1) Language about TOU: The proposed decision orders transitioning customers to TOU rates starting in 2019 after several years of pilot studies. In contrast, the alternate proposed decision more softly requires utilities “establish a goal” of defaulting customers to TOU. This difference may seem too small to matter but these directives are for the utilities to interpret, so the CPUC must be clear that TOU is to be the default.

2) Number of tiers: The original proposed decision consolidates and simplifies the current four tiered rate structure into a baseline allocation of energy at a set price according to regional energy burden (i.e., how much electricity an average home needs for basic services, such as lighting and cooling) with a TOU electricity price. In other words, it creates essentially two-tiers where the upper (TOU tier) may vary with time of day.

The alternate proposed decision breaks down the current four tiered rate structure into three tiers: a baseline and higher usage surcharge, and then layers the TOU price on top. In a tiered rate system, the price per unit of electricity increases as a customer uses energy during the month. Higher users pay more per unit of energy than low users when their usage exceeds a prescribed level. The high-use surcharge of the alternate proposed decision is essentially a third tier. Unless the surcharge threshold is set at a very high level so as to affect only a very small group of super users, it would be a broadly confounding message when marketed with time-variant rates. Tiered rates mix up the message about shifting energy use to align with when it’s cheapest, including times when there is an abundance of renewable energy available – one of the biggest benefits of TOU. Instead, a TOU rate without the tiers will be easier for customers to understand – and respond to – by avoiding energy use during the time of the day when it’s most expensive.

Again, the difference between two or three tiers might not seem important, but it makes it harder for customers to manage their bills by planning the daily timing of their energy use. For programs like TOU to work, folks need to easily understand how the pricing works and how they can save money.

3) Consideration of greenhouse gas emissions: Both the original and alternate proposed decisions suggest that the CPUC does not have enough information to tell whether or not TOU rates can reduce overall household energy use. EDF strongly supports requiring the investor owned utilities to develop peer-reviewed evaluations of the emissions-reduction potential for TOU. In addition, a menu of dynamic tariff options (e.g., tariffs that vary hourly or subhourly based on real-time wholesale energy prices) that integrate utility-scale renewables and reward distributed energy resources (e.g., energy efficiency, rooftop solar, and energy storage) are also recommended. EDF is eager to be a helpful partner in scoping and executing the studies.

4) Fixed charge vs. minimum bill: The original proposed decision would adopt a fixed charge while the alternate would implement a minimum bill charge. Both are aimed at making sure each customer pays for at least some portion of their fair share to use and maintain the central electric grid on which we all rely.

However, a fixed charge is just that: fixed onto each bill and is anticipated to be larger than a minimum bill charge. A minimum bill, however, sets a floor for how much a customer can pay on their monthly bill. This minimum bill keeps intact incentives for clean, distributed energy resources like rooftop solar, while the fixed charge can diminish savings from these upgrades and extend the payback period.

EDF’s recommendation

Taking these differences into consideration, EDF urges the adoption of the original proposed decision – with one caveat: we agree with the alternate proposed decision’s adoption of a minimum bill instead of a fixed charge.

Further, for this to be successful, these aspects need to be incorporated into the final decision with a directive for utilities to develop and be accountable for strong education, outreach, marketing, and enablement. This is particularly important for low-income customers enrolled in utility programs like the California Alternate Rates for Energy (CARE) program, which provides low-income customers with a 30-35 percent discount on their electricity and gas bills.

We all know making big changes to residential electricity rates is difficult. We also know it’s vital for California to realize a clean energy future if we are to avoid the damaging effects of climate change (like the historic drought we’re currently experiencing). So, why not take this opportunity to develop truly innovative electricity pricing that delivers a win-win for all Californians and sets a standard for the rest of the nation?

By Jamie Fine

Last week, the California Public Utilities Commission (CPUC) issued a proposed decision on residential rate reform. Residential rate reform – how and what Californians pay for electricity – is a thorny subject, and the Commission’s proposed decision is being met with a range of reactions.

We at Environmental Defense Fund (EDF) want to highlight a bright spot in the 300-page document that we’re thrilled about: the attention paid to time-of-use electricity pricing (a type of time-variant pricing). Buried in this long legal document, we see EDF’s fingerprints in the Commission’s call for California investor-owned utilities to ramp up their use of this innovative yet well-proven pricing tool starting with pilots in 2016 and going to scale in 2019.

How TOU Works

If you’ve been following EDF’s work in this area, then you know we’ve been involved in this process for many years and have probably gathered that we’re big fans of time-of-use pricing (TOU) because it better reflects the true cost of electricity, which fluctuates throughout the day. This type of pricing also empowers customers to better control their own energy bills and reduce our reliance on fossil fuels.

TOU pricing works by breaking up the day into two or three large intervals and charges a different price for each. Rates can be divided into off-peak prices (generally during the middle of the night to early morning), semi-peak prices (daytime and evening), and peak prices (occurring during periods of highest demand, usually afternoon to early evening). These rates remain fixed day-to-day over the season.

This simple method of pricing encourages customers to shift their electricity use away from times of the day when demand is higher, enabling the use of more clean energy when it’s available and plentiful (like solar energy during the daytime and wind energy at night). TOU pricing also helps reduce stress on the electric grid during periods of peak demand.

With its many benefits to the environment, electric reliability, and people’s pocketbooks, it’s not hard to see why the CPUC is considering rate reform to incorporate more TOU pricing across the state.

Breaking Down the Proposed Decision

So, how does the Commission’s proposed decision help California realize the potential of TOU pricing?

1. It illustrates the important role TOU can play in the effort to reduce our reliance on fossil fuels. Not only does this benefit customers and the economy, it will help California meet its carbon reduction goals.
2. The proposed decision calls on all three California investor-owned utilities – Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric – to begin piloting TOU pricing programs in 2016, with planning to begin immediately. Ultimately, the decision would make TOU the default option by 2019, though people will always be able to opt-out once TOU becomes the default option. But, as behavioral economics and retirement savings examples have taught us, it’s a lot easier to get people to do the right thing if it’s the default option.
3. The Commission indicated that it is looking out for low-income customers, requiring that utilities make a concerted effort to reach out, educate, and engage even the hardest-to-reach Californians. Studies show that people at all income levels support TOU electricity pricing because it helps folks save money and improve the environment. Nevertheless, there remains a legitimate concern that some customers just won’t have the ability to shift their energy use to take advantage of time-of-use pricing. This is why the attention to customer engagement and education in the proposed decision is vital: it’s on utilities to not just pilot the programs, but also help them succeed and take hold. This is also why other related efforts at the Commission to increase access to the technologies and appliances that save customers money are so important.

The final decision from the CPUC is due on May 30th, and in the interim, many stakeholders will be submitting comments and advocating for the rate reform they want during the public input period. There are substantial components of the decision having to do with collapsing the current four-tier pricing model to two tiers, and adding a fixed charge, to which many are already crying foul. These components have the power to dominate the discourse moving forward. However, we should not let them override the potential progress for TOU.

From EDF’s perspective, our dedication to fighting climate change and cleaning up our air makes the emphasis on time-of-use pricing an exciting step towards our clean energy future. By encouraging people and businesses to use clean energy when it’s available, time-of-use pricing could help us successfully integrate ever-larger amounts of clean power into our energy system. And even better, customers end up saving money under these programs and we can collectively avoid the construction of more dirty power plants which would otherwise be built to serve growing peak demand. TOU pricing is truly a win-win for everyone and EDF is excited to continue adding our influence to this new decision through comments and working with other stakeholders to ensure the promising aspects of this proposed decision become a reality.

Photo source: Flickr/Ian Britton

This post originally appeared on our California Dream 2.0 blog.

By Jamie Fine

This week I submitted testimony in support of a petition by the Citizens Utility Board and, my shop, EDF, to urge the Illinois Commerce Commission to require Commonwealth Edison (ComEd) and Ameren, two of Illinois’ biggest utilities, to provide families and individuals with new ways to reduce their energy bills: electricity pricing based on the hour of the day. This “Time-of-Use” (TOU) option provides times of the day when electricity will be much cheaper than the all-day, “flat” electricity pricing currently used today. Such electricity rates would reward energy-efficient customers and those who shift electricity use away from “peak” hours—when demand is high, prices skyrocket, and power plants produce the most pollution.

Our petition to the Illinois Commerce Commission, which is in charge of regulating electric utilities in the state, asks for ComEd and Ameren to offer optional rate plans beginning 2016. With voluntary TOU electricity pricing, families with digital meters can enjoy lower electric bills by running certain appliances, like the dishwasher, when electricity is cheapest, such as early in the morning or late in the evenings. However, the benefits go far beyond households that participate. Cutting energy use at high-demand times, like the afternoon, lowers electricity prices for everyone, reduces stress on the power grid, and offsets the need for expensive, polluting power plants.  

People-Powered Pricing: @cubillinois & @EDFEnergyEx are pushing for Time-of-Use plans to save...
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Even though market prices plunge to just a few pennies per kilowatt-hour or lower at certain hours of the day—most Illinois residents cannot take advantage of these low prices because they are locked into rigid, “flat” rates that only change with the season (e.g., summer, non-summer).

EDF has been looking carefully at different electricity pricing plans because they are the currency for rewarding people (and their third party service providers) for clean energy investments, such as energy efficiency and self-generation, like solar rooftop panels.

A well-designed and effectively implemented TOU electricity pricing plan would provide at least five concrete benefits to Illinoisans:

1. Give families and individuals the opportunity to reduce electricity bills by running certain appliances when energy is least costly, simply by providing more information that ties the cost of electricity production to the timing of energy use.
2. Charge families and individuals for the electricity they use, not their neighbors. In the current flat-rate pricing structure, the cost of electricity is the same for everyone, and energy-hungry neighbors may drive up the cost of electricity for everyone. With TOU electricity pricing, savvy families will be rewarded for their conservation efforts and help lower the overall price of electricity for everyone.
3. Reduce energy use at “peak” hours, offsetting power companies’ need to purchase the highest-priced electricity, as well as avoid the need to build more power plants. In turn, greater efficiency at existing power plants means improved cost-effectiveness for power companies.
4. Improve air quality by helping reduce the need for fossil-fueled power plants, especially inefficient, high-polluting “peaking” power plants that only run a few hours every year. Instead, Illinoisans can choose to use electricity when renewable energy is available and opt for other money-saving, clean energy solutions like energy efficiency.
5. Increase the power grid’s ability to integrate more renewable energy by signaling to families when they should use and avoid using energy, effectively reducing the need for expensive “peaker” power plants.

While TOU electricity pricing may be new to Ameren and ComEd customers, there is an enormous history of successful TOU programs in the US and abroad. Consequently, we know what to expect in terms of participant response, as well as what program features to include to spur enrollment and to maximize the number of families who see their bills decline from people-powered pricing options. In addition to those who adopt the TOU electricity pricing plan, all Illinoisans stand to gain from a billing structure that better reflects the cost of producing electricity.

Some of those features include:

• Use best practices for outreach and marketing people-powered pricing programs as learned from other electric utilities.
• Try-it-Before-You-Buy-It: Use “shadow” billing, where individuals and families can see what they would have paid under a flat rate as compared to TOU electricity pricing plan. Providing shadow bills for several months will help Illinoisans plan for and adopt new technologies (such as programmable thermostats) and habits (such as running the dishwasher when you go to bed instead of immediately following dinner).
• Provide a period of bill protection after the switch to TOU electricity pricing, particularly if shadow billing suggests a customer may experience a bill increase.
• Ensure low-income customers are provided with every opportunity to benefit from TOU electricity pricing, including access to newer, energy efficient appliances and building weatherization technologies.
• Provide Illinoisans who voluntarily enroll in TOU electricity pricing programs with set-it-and-forget technologies. Several pilot programs, including in the Sacramento Municipal Utility District’s service territory, indicate that the provision of advanced thermostats – user-friendly thermostats that can precool homes in advance of high-demand, expensive times – help people plan around times of peak energy prices. The ICC has already directed ComEd and Ameren to make the piloting of in-home devices a part of the utilities’ energy efficiency programs. Such programs could be coupled with efforts aimed at enrolling families and individuals in a TOU electricity pricing plan.

With so many options to save Illinoisans money and help the environment, EDF, in partnership with CUB, Ameren, and ComEd, urges the Illinois Utilities Commerce Commission to investigate Time-of-Use electricity pricing options today and continue to advance the Land of Lincoln’s clean energy economy.

By Jamie Fine

Source: limelightpower flickr

This post was co-written by Chris Yunker, Rates and Analysis Manager at San Diego Gas & Electric.

Industrial and environmental stakeholders are usually portrayed as adversaries. But one exciting example from California proves there can be another side to that story. San Diego Gas & Electric (SDG&E) worked with Environmental Defense Fund, Sunverge, Google, and the California Public Utility Commission at Rocky Mountain Institute’s eLab Accelerator to investigate electricity tariffs that enable new technologies and practices and to reveal their costs and benefits to the grid. As distributed energy resources (DERs) continue to grow rapidly, there is increasing need to enable the marketplace to value utility-supplied grid services and customer-sited resources.

SDG&E serves 3.4 million people in and around San Diego, and is also home to roughly 10,000 electric vehicles and 40,000 rooftop solar systems. SDG&E is responsible for keeping the lights on despite growing demand (the region has one of the largest EV adoption rates in the nation) and variable electricity generation (PV panels stop producing at sunset).

Rather than resisting these changes, SDG&E has been working collaboratively to explore a vision of a future with even greater quantities of distributed energy resources. That vision looks at several features:

• Tariff options available for customers to buy or sell services to or from the electricity grid.
• Customer rate options that are unbundled sufficiently to align with current or future technology capabilities, and broken out by attributes of interest, such as capacity, energy, and ancillary services.
• Pricing by time, location, cleanliness, and power quality.
• Valuing electricity generation and demand-side resources consistently based on the energy attributes they provide.
• A menu of tariff options that
  — keep it simple for customers who want simplicity;
  — provide clear ways for customers to save money, including controllable set-it-forget-it technologies;
  — enable meeting state and federal environmental and other policy goals;
  — address the special needs of customers; and
  — provide a seamless gateway for DERs to realize their benefits.

Embarking with this vision in mind, the group defined a structure to be available optionally to customers interested in using technologies and/or practices to provide products and services to the grid. The key is to accurately reflect the costs and benefits, while allowing for the great diversity of customer interests and capabilities.

Toward a shared goal of enabling high penetration of DERs through a menu of gradually-introduced rate options and credit mechanisms, the team conceptualized one rate option. Dubbed the "Smart Home Rate", the tariff would be geared toward adopters of any number of distributed resources (for example: distributed generation, energy efficiency, demand response, storage, smart thermostats, and electric vehicles) including those that enable automated responses to grid signals and market prices.

The structure seeks to fairly compensate customers, the utility, and third-party participants for the full range of services they provide. Essential components include:

1. A monthly service fee ($/meter) to cover customer costs such as the meter and a customer contact center
2. A grid charge that allows customers to benefit by managing their load profile
3. A day-ahead hourly price signal ($/kWh) that allows customers to utilize technologies to both avoid periods of high costs/high demand and benefit from utilizing energy during negative pricing events that occur during periods of low loads and high renewable supply

There is still a lot of work to do to refine these tariff components and to make an option like the Smart Home Rate available to SDG&E customers. Yet we all can see the benefit of offering customers the choice to adopt new technologies in a way that will reduce their bill and utility costs. While such collaboration might not grab headlines, it can certainly be an important reason to have great optimism for the future of clean energy.

The eLab Accelerator team included the two authors; Kurt Adelberger, a principal with Google; Jon Fortune, Director for Regulatory and Energy Services at Sunverge Energy; and Gabe Petlin, Senior Analyst for the California Public Utilities Commission.

This commentary originally appeared on the Rocky Mountain Institute blog. 

By Jamie Fine

Back in January when Google announced it would spend $3.2 billion to purchase Nest, EDF knew this was a company to watch. The results of three new reports, released today, confirm that controllable thermostats like the Nest Learning Thermostat are both customer-friendly and useful for energy system planners. Moreover, the reports signal that smart devices, such as those Nest manufactures, have potential for generating marked savings for utility customers.

The reports analyze 2012-2013 energy use data gathered from four major utilities across the U.S. that offer Nest energy services programs: Austin Energy, Reliant Energy, Green Mountain Energy, and Southern California Edison.

The first report evaluates the results of Rush Hour Rewards, a demand response service that changes the temperature of the homes of Nest users during energy “rush hours”, or times when demand on the grid is highest. The second examines Seasonal Savings, a program that runs for three weeks and slowly modifies the temperature according to the customer’s behavior (which this smart thermostat is able to ‘learn’ via its built-in motion sensor and understanding of its owner’s temperature preferences). Both operate during times of heavy usage, namely winter and summer. The third report analyzes home energy data of Nest customers more broadly, comparing energy use before and after the installation of a Nest Thermostat.

A graph from the Rush Hour Rewards (RHR) report that shows AC usage during the hottest part of the day (a.k.a., the ‘rush hour’)and how the RHR program is able to significantly reduce home energy consumption using its automated energy management system.

While each report details unique findings, EDF found three notable common threads.

1)     Nest Thermostats successfully reduced peak demand on the electricity grid. 

One of the main aims of any smart thermostat is to better understand customers’ energy usage so that energy providers and managers can utilize this information to create less of a strain on the grid. Curbing peak energy use during the hottest and coldest months (and times of the day) offsets the need for expensive, dirty ‘peaker’ plants that are used only to generate power several dozen hours per year and typically run on fossil fuels like coal. Through tools such as “rush hour” temperature adjustments and scheduled temperature shifts (based on the natural, observed routine of customers), Nest Thermostats successfully lessened the air conditioning demand on the electricity system, often greater than 50% during peak times.

2)    Customers saved money. 

It probably goes without saying that lower demand equals lower costs.  After installing a Nest Thermostat, people in Southern California saved an average of 1.16 kWh per day, or 11.3% of AC-related energy usage, equating to roughly $28 in energy savings over the course of one summer (assuming a price of 16 cents / kWh).

Unfortunately, for its report comparing energy use before and after the installation of a Nest, they only looked at energy savings in Southern California, where summer temperatures are mild compared to a place like Austin, Texas. For example, last summer, temperatures in Austin soared to a blazing 103°F, but Austin Energy was able to lower AC runtimes during the hottest part of the day by 56%, on average through their Rush Hour Rewards program. So a similar cost-savings analysis for Austin Energy customers with Nest Thermostats might actually reveal more impressive numbers compared to those uncovered in the study of Southern California Edison customers.

Another key insight from this report related to customer savings highlight that incentive structures for compensation of demand response programs may matter. In the AE pilot, customers were given an $85 thermostat up front, which seemed to encourage more adoption. "There was a meaningful difference in enrollment rates based on the method of customer payments,” says the report. “In AE, where the first two years of incentives were paid up front upon enrollment, 39% of Nest’s customers enrolled in Rush Hour Rewards. In contrast, only 19% of Southern California Edison’s Nest customers enrolled in RHR. Incentives for SCE’s program were paid in bill credits on a monthly basis."

3)    Customers remained comfortable and in control (and more want in on the action). 

Nest clearly makes great efforts to ensure customers reduce energy use without significantly affecting their comfort levels. Participants in the Rush Hour Rewards program receive a notification the night before that tells them what time the rush hour will start and end, during which time the temperature will change no more than two degrees. People are ultimately in control and individuals can always easily opt-out of any Nest program by simply changing the mode on their thermostat.  In fact, following the Season Savings trials, 95% of customers still felt they had complete control over their comfort.

Furthermore, there is evidence that Americans support devices and programs such as these. For example, only a few weeks after the Rush Hour Rewards programs went live, Nest succeeded in enrolling the first 1,000 Austin Energy and 1,000 Southern California Edison customers, with subsequent enrollments continuing at a rapid pace. At least 20% of Nest customers in each utility area signed up for Rush Hour Rewards by the end of the summer.

These reports demonstrate Nest can achieve its goal of reducing peak energy demand, while saving customers money and meeting their energy needs without being disruptive to people’s normal habits. Encouraging people to reduce their energy demand is not new, but the availability of smart devices like the Nest allows for an ease-of-use and automation that completes the chain of action for these demand response events to work smoothly and reliably.

More profoundly, this new evidence from Nest is a harbinger for a grid-connected world.  Currently Nest is showing how smart thermostats help to keep the lights on across the grid and lower energy bills without compromising on comfort.  Soon, other appliances, vehicles and, for some of us, self-generating electricity systems will be a part of an interconnected electricity mesh that performs useful services for people and the electricity grid.

By Jamie Fine

Buildings account for 40% of our nation’s electricity use. In 2012, power plants spewed about 2 gigatons of global warming pollution into our air, which was about one-third of total U.S. emissions. That’s why EDF and the U.S. Green Building Council (USGBC) teamed up to launch the Demand Response Partnership Program (DRPP) aimed at  enrolling LEED-certified commercial buildings in host utility demand response (DR) programs. Since the program’s inception over 2 years ago, the preliminary results of this collaboration are now available. Our 2013 DRPP Year End Report details how the program is educating building energy managers to drive adoption of demand response programs for commercial buildings.

DR is used to reduce energy use by rewarding utility customers who use less electricity during times of “critical,” peak electricity demand. The DRPP asks LEED buildings that are already quite efficient to operate in low power mode when the grid is stressed. The DRP Program used the USGBC’s newly posted LEED ‘Pilot Credit 8: Demand Response’ as an implementation guideline and leveraged its relationships with the building community to foster adoption and participation in existing utility and solution provider demand response offerings.

The report looked at three areas to measure the program’s success in 2013: Recruitment and outreach to potential participants, research and analysis of data from participants, and education about the DRP Program. A few key highlights are outlined in the Year End Report:

The preliminary results of the Demand Response Partnership Program (DRPP), a unique partnership launched by EDF and the U.S. Green Building Council (USGBC) in 2011, are now out in a new report. Photo Source: Harvard University

• Completed outreach to 572 LEED ‐registered and ‐certified buildings, representing 275 million square feet. Of these, 133 buildings (representing 51 million square feet) are enrolled, evaluating enrollment, or have been determined to be DR ready.
• Entered data analysis and reporting phase with a research pool of 30 buildings agreeing to provide energy usage data and nearly 200 buildings participating in the Building Systems Assessment Survey.
• Energy use data for 14 buildings, representing a total of 125 demand response events, were analyzed and this analysis will serve as a basis for future case studies.

The USGBC & EDF partnered with select utilities, solution providers, and program sponsors to achieve these milestones.

LEED Buildings Movement Leads the Way

According to the DRPP landing page on the USGBC website, “DRPP is part of a larger movement by LEED to get builders and architects to start thinking more holistically about their buildings and considering the interconnection between building systems. Demand response is another step in this tradition and focuses on thinking beyond the walls of the project to consider the interconnection between energy use decisions (how much and when it is used) and the impacts on energy generation and distribution capacity.”

Project registrations for the DRPP LEED credit have continued to pick up and now total over 300 across the country.

More Results to Come

This year, DRPP will continue with data analysis and reporting, focusing on feedback surveys from commercial building participants and partners. EDF is examining the environmental impacts of demand response events by testing the premise that DR is both environmentally beneficial and key to increasing renewable generation.

The results of this analysis will be released in a final report in summer 2014. In the meantime, EDF will continue working with its DRPP partners to maximize the untapped potential of demand response to reduce carbon emissions, lower energy bills, and improve grid resiliency.

By Jamie Fine

This commentary originally appeared on EDF's California Dream 2.0 Blog

When was the last time you really gave a lot of thought to your electric bill?

If your answer is “not very often”, then you’re not alone. In fact, the typical household thinks about their electric bill only six minutes a year.

The California Public Utilities Commission (CPUC) now has the opportunity give people another way to control household energy bills by creating a system where changing the time you use electricity can save money. This won’t mean you’ll need to invest more time thinking about energy use, but you’d be well-served to think about the timing of it.

Last week, the CPUC held a public workshop inviting stakeholders — PG&E, SCE and, SDG&E, along with consumer, industry, and environmental groups — to present and discuss their proposals for revising the system of charges for residential electricity use. I had the pleasure of presenting EDF’s proposal for a time-of-use (TOU) pricing system: For customers looking for another option for saving money on their monthly bill, EDF sees TOU as the best pricing policy for both people and the environment; customers uncomfortable with this option would be able to “opt out” and choose another pricing structure.

Currently, the standard “tiered” rate charges customers higher prices for higher electricity usage. The approach is intended to send the message: “The more you use, the more you pay.”

Yet, current rates hide the true cost of electricity service at certain times of the day – and most customers don’t know where their usage falls until they actually see the bill at the end of the month. Ultimately, this lack of information prevents customers from making informed decisions about their energy use, limits their options for keeping bills within budget, and makes the overall energy system in California dirtier and more expensive.

As detailed in our proposal, EDF has found that updating the current pricing policy to be based on the timing of actual energy use will empower consumers to save money, dramatically lower overall system costs, facilitate more efficient usage of electricity generation assets, lower peak energy demand, provide more accurate and effective energy conservation incentives, and more equitably share energy system costs amongst customers. Here is a short list of what TOU can do for you, and California:

• Dramatically Lower System Costs.  Using the utilities’ own data on the costs of serving electricity to customers, EDF estimates that if half of residential customers adopt the optional TOU rates available already , we’d reduce the cost of service by around $500 million each year.  If translated directly into savings for residential electricity customers, electricity rates could be reduced significantly: a roughly 15% rate decrease would be enjoyed by all customers. How can this be so?  Simply put, it is most expensive to provide customers with electricity at times when demand for electricity is highest.  If customers paid for energy based on actual costs of electricity service, they would see higher prices at peak times and thus be motivated to shift energy use to cheaper times of the day.  This shifting is better for overall system costs, and better for your wallet.

• Avoid Adverse Environmental Impacts. TOU will: (1) reduce the need for “peaker” power plants that tend to be fossil-fueled, expensive to operate and among the most polluting resources on the system, (2) reduce the environmental impacts and costs of siting, operating and building power plants and transmission lines, and (3) help to integrate increasing quantities clean, renewable resources.

• Attract Clean Energy Investments for Residential Consumers. TOU will spur innovation in the electricity marketplace, promoting the development of new services and technologies that enable utilities and customers to better manage electricity production and use through distributed, resilient, clean, and low-cost energy services and products. While the average customer may not think much about how and when they use electricity, service and technology companies live and breathe it. TOU rates provide new value propositions that clean energy innovators will deliver to our doors.

• Reward you for your choices. A recent survey of nearly 5,000 customers by Pacific Gas and Electric and Southern California Edison found that 75 percent have tried shifting their energy use already – even though they receive no financial rewards to do so.

EDF’s proposal is a win-win for people and the environment, and takes us along the path to a cleaner, cheaper, and more resilient energy system. I urge the CPUC to conclude the same with a decision this Fall that will set the direction of California electricity pricing and prompt utilities to provide the robust consumer education and enablement with set-it-forget-it technologies.

While the concept may be complex, TOU will be better for you, for the environment, and the clean energy marketplace.

By Jamie Fine

This commentary was originally posted on EDF's California Dream 2.0 blog.

“The cream cheese just fell off the roof of the car,” my 7-year old daughter said as I turned into my driveway after a trip to the grocery store. Right now you might be asking yourself, “What does this have to do with time-of-use pricing?” Allow me to explain.

We live in Alameda, CA, where plastic bags are prohibited and stores must charge for a paper bag. Alas, I had forgotten to bring a reusable one. To teach my children a lesson and avoid the public scorn (not so much the $0.05 per bag), I carried our groceries and asked the kids to lend their hands. And yes, I put the cream cheese on the roof of the car to free a hand to unlock it.

Once home, I realized that, in addition to almost losing my cream cheese, I’d been making potentially risky tradeoffs. After all, exiting the supermarket with full hands prevented me from holding my children’s hands while crossing a busy – and dangerous – parking lot.

Don’t get me wrong; I’m not lamenting the ban on plastic shopping bags. I think it makes perfect sense, but it takes time to start making the adjustment and the risk tradeoffs aren’t always obvious.

This scenario– making adjustments that may seem inconvenient and a bit scary, but are well worth the effort– plays out in other areas of life as well. Particularly in rethinking how Americans use and pay for electricity.

Source: Union Atlantic Electricity

Most of us don’t think about how the time of day affects the cost of serving us power. In California, we aim to change that by moving to Time-of-Use (TOU) pricing – which will make electricity more expensive during times of peak, or high, energy demand and cheaper off-peak. In fact, just yesterday, the Sacramento Municipal Utility District (SMUD) recommended moving all residential customers to time-of-use rates by 2018 in an effort to give customers more control over energy costs.

EDF believes that TOU pricing will be best for people and the environment, just as banning plastic shopping bags effectively reduces their environmental impact. This approach can encourage conservation and reduce peak energy use while providing customers with more choices that can ultimately lower their monthly bills. Switching to TOU electricity pricing may feel to some like being thrust into a busy parking lot with an armload of groceries and two children to monitor. When should I use my dishwasher? Do I need to reset my air conditioner? Well, yes and no. You can choose to do nothing, or you can exercise a choice you don’t have with our current pricing structure: shifting energy use to times of lower electricity prices. It’s quite doable.

A recent survey of nearly 5,000 customers by PG&E and So Cal Edison found that 75 percent have tried shifting their energy use already – even though they don’t get paid to do it. Two-thirds of respondents said they’d be willing to risk higher bills for the chance to save energy for environmental purposes. This willingness, combined with wise policies – such as the “Try-Before-You-Buy” bill protection that prohibits bill shocks for up to one year after a customer changes rate plans – bodes well for the union of can-do attitudes and technology innovations like digital electricity meters and automated “set-it-and-forget-it” learning thermostats.

The rewards will be significant: TOU pricing will reduce the amount of peak electricity needed from dirty fossil fuel “peaker” power plants, thereby avoiding costs from blackouts and new energy infrastructure investments. It can also help to incorporate more renewable, clean energy resources onto the grid – like wind and solar – with significant benefits for energy independence and reduced air pollution that will put us on a pathway toward stabilizing our climate.

Source: Citizens Utility Board of Oregon

Most consumers will see lower energy bills from TOU electricity pricing without doing anything. Others will need to make adjustments, particularly homes that use a lot of energy during peak energy times of the day. With a little planning, knowledge and helpful technology, it can be as easy as keeping extra shopping bags in your car.

Just as banning plastic bags is helping to reduce environmental degradation, so too can TOU electricity pricing. We just need to get comfortable with the idea. That way we can have our cream cheese and clean environment, too.