Customers Demand Clean Energy Options, PGE Responds With DR Test Bed
Posted on March 14, 2019 by Mike Goetz
Tags, Energy
It is truly a fascinating and groundbreaking time to be working in the energy and utility space. Thanks to various creative options and new technologies, end-use consumers are beginning to have more control over how their energy needs are met. Factor in the need to tailor the electric sector to a carbon-constrained world while mitigating price increases, and demand response (DR) starts to look attractive as a benefit both to customers and to the grid at large. Broadly put, DR is a change in the power consumption of an electric utility customer to better match the demand for power with its supply. It gives customers the opportunity to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to financial incentives.
That is to say, the utility can purchase energy services (i.e. reduce demand) directly from customers, in lieu of, say, purchasing natural gas from the Rockies or Alberta, CA to run power plants. If utilities can reduce electricity demand, compensate customers, and decrease our reliance on fossil fuels that are subject to price volatility, that’s a win-win-win situation. Therefore, at CUB, we were quite pleased when representatives from Portland General Electric (PGE) reached out to us last year to be part of a steering committee to help inform their ambitious, newly-minted DR Test Bed.
While the Test Bed contains a peak time rebate (PTR) to financially incentivize customers to use less electricity during peak system need hours, PGE has plans to go well beyond merely compensating customers for decreasing their usage. This tariff filed by the company lays out the terms of its PTR. Customers who are located in geographic areas served by three specific PGE substations will be automatically placed in the PTR system with an option to opt out. CUB supports this model, as customers can only stand to benefit by being placed in this program; it is entirely optional to participate, and customers will receive a rebate if they choose to. The PTR pilot will provide a rebate to customers who reduce their electricity consumption when notified by PGE that there are peak system needs. The pilot will run through June, 2022.
After rollout of its PTR pilot, PGE’s DR Test Bed will begin to examine approaches to allow customers to opt into direct load control program offerings. Direct load control of customer-owned appliances is another facet of DR that has tremendous potential for customer savings and system-wide clean energy benefits. In programs like this one, the utility can compensate customers for the ability to adjust flexible resources that they own, like storage batteries, thermostats and water heaters, and electric vehicle charging. Importantly, customers will have a say in the parameters under which the utility may control their devices. A participating customer can rest assured that their electric vehicle will be charged in the morning, or that their house will remain a comfortable temperature, even as they are compensated for allowing the utility to control the impact their home has on the system.
While this program is still in its infancy, it aims for high-reaching objectives that have been established by the Oregon Public Utility Commission (PUC). The PUC has directed PGE to reach DR capacity of 191 MW in the winter, and 162 MW in the summer, in the years following 2020. To put this in perspective, that nearly rivals the capacity of PGE’s Port Westward 2 natural gas plant. Wouldn’t it be better for PGE to compensate customers for their participation in DR programs than to build more gas plants? CUB thinks so, and this program may eventually achieve just that.
CUB applauds PGE’s leadership in committing to these ambitious goals for DR in Oregon. In a world that urgently needs to decarbonize, DR will play a huge role in cleaning up the energy sector. CUB believes programs like PGE’s that provide customers with an increased level of participation, and compensate them for doing so, are in the public interest. We are excited to continue working with PGE to monitor the progress of their DR pilot rollout.
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03/14/19 | 2 Comments | Customers Demand Clean Energy Options, PGE Responds With DR Test Bed