Customer Opt-in Dynamic Pricing (CODP)
Dynamic pricing is an innovative way to create a win-win situation for customers and the electricity grid, offering an alternative to the traditional Time-of-Use (TOU) model.
Ottawa-based energy solutions company, Energate Inc., worked with Ontario utility, Alectra Inc. (formerly PowerStream), to develop the Customer Opt-in Dynamic Pricing (CODP) program.
The program was marketed to 1,000 participants as Advantage Power Pricing (APP) a technology enabled dynamic pricing program for residential customers. By encouraging customers to shift demand to off-peak periods, it continues to provide savings to both the grid and to customers.
Participants were provided with an Energate Foundation Smart Thermostat that automatically responds to price signals based on customer preferences. The thermostat pre-heats or pre-cools the home in advance of and conserves during peak price periods. This helps to minimize electricity use during high-priced periods. The program featured an aggressive price schedule with rates as high as 60 cents per kWh, and yet was very popular with participants
who appreciated both the significant savings and the technology they received.
With support from the Ontario Ministry of Energy’s Smart Grid Fund, Energate’s project tested the potential of dynamic electricity pricing. For customers, value was created through reduced electricity bills, and for the smart grid through interactive demand response.
Read the complete story: Customer Opt-in Dynamic Pricing
Energate & PowerStream Deliver Customer Opt-In Dynamic Pricing Program to Additional Participants
Successful Summer Pilot Prompts a Second Pilot to Evaluate the Impacts of the Winter Season
OTTAWA – February 16, 2016 – Energate Inc., a leading provider of interactive energy management solutions that enable next-generation energy management for the Utility Internet of Things (IoT) and the connected home has been working with PowerStream to deliver the first of its kind in Canada, a Customer Opt-in Dynamic Pricing (CODP) program for residential customers – providing significant savings to the grid and to customers.
The success of the pilot prompted PowerStream to launch a second pilot to evaluate CODP impact during the next two seasons (winter & summer 2016). Approximately 500 new participants were enrolled for the winter and 300 more customers will be enrolled for the summer of 2016. With a second summer, additional data on a larger number of customers will further validate the value of this innovative program.
“The Advantage Power Pricing program exceeded our expectations,” said Mark Henderson, PowerStream’s EVP Asset Management & Chief Operating Officer. “So much so that we are expanding the evaluation of the effect of dynamic price signals and set-and-forget technology on managing peak demand.”
The summer 2015 program was delivered with support from the Ontario Ministry of Energy’s Smart Grid Fund and Energate. Advantage Power Pricing (APP), as named by PowerStream, was a voluntary, dynamic pricing program for residential customers. Customers who took part in the pilot paid a very low price for off-peak energy use (4.9¢), while their peak use from 3:00 to 9:00 p.m. on weekdays varied between one of three rates (12¢, 24¢, and 48¢), based on actual provincial electricity demand. When demand was extremely high, critical peak price events took place at 60¢ per kWh. Customers paid the lowest, off-peak, rate over 80% of the time.
“Enhanced technology for the second pilot will provide participants with additional information to help them save,” said Steve Dodds, Energate’s CEO. “The benefits will be long lasting as over 80% of respondents in the first pilot reported they had developed lasting saving behaviours that would continue over time.”
All participants in the first pilot received technology – Foundation Smart Thermostat and Home Energy Gateway, mobile apps, and ZigBee-enabled smart meter – and information to adjust their consumption in response to daily electricity demand. On average participants received an $80 cheque that represented their savings DURING THE SUMMER PERIOD compared to Time–of-Use (TOU) rates. With 1053 people participating, peak electricity demand decreased by approximately 1 MW.
Customer Opt-in Dynamic Pricing can be implemented at any Local Distribution Company. As with TOU rates, dynamic pricing has the potential to benefit microgrids, Conservation and Demand Management, Demand Response, energy storage, and further development of in-home tools for customers.
“The Government of Ontario is committed to providing electricity consumers with the tools they need to manage their electricity consumption and reduce their bills,” said Energy Minister Bob Chiarelli. “The province-wide investment in the modernization of our electricity system has enabled great innovation in smart grid technology and we are excited to be taking this next step with PowerStream and Energate.”
Energate Inc. provides interactive energy management solutions that enable next-generation energy management and the connected home. Energate’s vertically integrated Consumer Connected Demand Response™ platform provides management of two-way communication and demand response events through a flexible solution that includes devices, middleware, and applications. Energate’s Internet of Things solution is an interoperable architecture that has been proven in the homes of more than 40 North American utilities’ customers.
PowerStream is a community-owned energy company that provides power and related services to more than 375,000 customers residing or owning a business in communities located immediately north of Toronto and in Central Ontario.
Dynamic Pricing Intended to Give Customers a New Cost Advantage
By Daniel Carr, Manager, Smart Grid Projects, PowerStream
An innovative pilot being run by PowerStream is providing participating customers with a dynamic new way of managing their electricity costs – one with the potential to provide significant savings to the grid and to customers. Participants are being given the information and tools they need to adjust their electricity consumption and costs in response to actual provincial electricity demand on a given day.
Supported in part by the Ontario Ministry of Energy’s Smart Grid Fund, and Energate Inc.’s Consumer Connected Demand Response platform, Advantage Power Pricing is a voluntary and dynamic pricing program for residential customers. Customers taking part in the pilot will pay a low price for off-peak energy use, while their peak use, from 3:00 – 9:00 p.m. on weekdays, will vary to one of three rates, based on actual provincial electricity demand. Prices will be finalized in mid-April but are estimated to be 5¢ for off-peak prices, and 10¢, 20¢ and 40¢ for the low, medium and high prices respectively. Customers will pay the lowest rate over 80% of the time.
Customers will be notified daily of the demand-based price that will apply during the next day’s peak period, and given the opportunity to shift their consumption away from higher-price periods to lower-price periods.
This shifting of consumption enables customers to better manage their electricity costs while at the same time helping to further reduce the strain on the province’s electricity grid. And it will do so in a more precise way than existing time-of-use pricing programs alone can achieve. If this program moves beyond the pilot stage and becomes available to a larger number of customers, it will help to reduce the need to build costly new power plants.
Customers who register in the program are equipped with an Energate Foundation™ Smart Thermostat and Home Energy Gateway, which give them access to up-to-date pricing information and then respond to price changes – intelligently, automatically and according to the customer’s preferences.
The thermostat can respond to price changes by increasing the temperature to which the house is cooled, and can even pre-cool the home to limit consumption during peak times. For customers with electric water heaters or pool pumps, load control switches can also control these appliances to further reduce electricity cost during peak times. The customer is always in charge of their energy consumption, and can even change settings and view consumption from anywhere through web and mobile applications.
“Participants in the Advantage Power Pricing pilot program are expected to save approximately 10 per cent on their electricity costs this summer,” says Martin Rovers, Director of Energy Solutions at PowerStream. “The program is also risk free, so customers are guaranteed to not pay more than if they were still on the existing time-of-use pricing plan.”
PowerStream is the first distribution company in Ontario to offer this innovative pricing plan to its customers. The project is intended to test out the customer appeal and electricity savings provided by the pricing plan in combination with new technology It is hoped that this pricing plan will later be made available to all PowerStream customers, and to customers of other distribution companies across Ontario. The pilot will wrap up later this year, with results published in early 2016. As of mid-March, PowerSteam was approaching its target to recruit 1,000 participants for the trial.
“The Government of Ontario is committed to providing electricity consumers with the tools they need to manage their electricity consumption,” said Energy Minister Bob Chiarelli at the time the project was announced. “The province-wide installation of smart meters has enabled great innovation in smart grid technology and we are excited to be taking this next step with PowerStream and Energate.”
PowerStream is a community-owned energy company providing power and related services to more than 370,000 customers residing or owning a business in communities located immediately north of Toronto and in Central Ontario.