How to Win a Customer’s Interest in Demand Response

By integrating demand response and efficiency, utilities will be better equipped to convince the customer to take part in demand response programs.
Published: Wed 05 Mar 2014

While energy efficiency and demand response mean different things behind the meter, they still mean the same thing to utility customers—​cost savings.

Customers don’t differentiate between energy efficiency and demand response. To them, they basically mean the same thing and offer the same things.

While it makes perfect sense for utilities to get customers to reduce their load when grid reliability is threatened, it makes absolutely no sense for the customer. Customers don’t understand why they should save money for the five to ten critical peak days that matter to utilities, when they could be saving money every day when it matters to them.

Integration of demand response and energy efficiency

So how can a utility convince consumers- both big and small- to participate in demand response programs? The answer is this-integrate demand response and energy efficiency.

NV Energy has adopted this strategy. Through its mPowered program, the first large scale integrated efficiency and demand response program, the utility is cutting electric use and peak load with high customer satisfaction levels, says Michael Brown, NV Energy demand response manager.

NV Energy thinks demand response and efficiency programs can blend efforts to change customer behavior with automated systems. “They have to come hand in hand,” says Mr Brown.

In order to increase customer engagement with the mPowered Optimization Program, the Nevada utility told BuildingIQ it could bring its intelligent efficiency software to big commercial customers like the Las Vegas casinos if it convinced them to participate in demand response. BuildingIQ’s Predictive Energy Optimizationtm integrates energy efficiency and auto demand response for commercial customers to deliver significant load reductions without impacting comfort.

Singular concept is successful

By introducing demand response and energy efficiency as a singular concept, BuildingIQ persuaded utility customers, whose energy usage is critical to their business operations, that its software would save them energy and money. This would be carried out without disrupting business operations and its customers.

As a result, BuildingsIQ’s integrated energy efficiency and automated demand response solution reduced its consumption by 10% to 18%. This was done by automatically adjusting the air conditioning systems that drive consumers' energy costs through the roof and suck the power grid dry during the hot summer months.

The solution continuously monitors inputs including weather, occupancy, energy prices and demand response events. Based on those inputs, it runs thousands of computations to arrive at the most efficient heating, ventilation and air conditioning operating strategy for the next 24 hours. It makes small changes in temperature and pressure that result in large heating, ventilation and air conditioning savings. NV Energy allows its customers to override the increase in temperature settings during demand response events.

NV Energy has thus far enrolled 12MW in their pilot demand response program. It is targeting another 10 MW by next summer and is looking to get 75 MW by 2016. In the first year, participating customers dropped their heating, ventilation and air conditioning consumption by 12% to 20% during demand response events.

Basically, the idea here is that customers don't notice the load reduction. It is a win-win situation for the customer and the utility. The customer gets to enjoy cost savings and the utility gets another demand-side resource.

Says Michael Nark, president and CEO of BuildingIQ of the solution, “By burying demand response into energy efficiency, everybody really participates.”