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|Listen Test Learn - National Grid Smart Grid Pilot|
This article is republished from the June 2016 issue of Strategies, AESP’s exclusive magazine for members. To receive Strategies, please consider joining AESP.
Listen, Test, Learn – National Grid's Smart Grid Pilot
By Beth Delahaij
National Grid's two-year smart grid pilot program in Massachusetts is complete and the results are in. Smart Energy Solutions (SES), a community-based program centered in the City of Worcester, has distinguished itself from other smart grid pilots in a host of ways. Having enjoyed success in its two years and having learned an amazing amount, National Grid hopes to continue Smart Energy Solutions in Worcester. The Company has filed for a two-year extension of the program with the Massachusetts Department of Public Utilities, and is currently operating on an interim extension granted by the MA DPU, with pilot rates, in-home technology, and customer outreach all remaining in effect.
For starters, SES included a strong community element and physical presence in Worcester, the largest city in National Grid's Massachusetts electric territory. The city was chosen to pilot the program due to its diverse demographics, enabling the company to use the results to help scale up smart technologies across the Commonwealth.
National Grid adopted a "listen, test, learn" approach to customer education and feedback that aided in early program design and ongoing adaptation of the program to the needs of its customers. For example, National Grid conducted a public summit during the pilot design phase that allowed it to hear from a diverse cross-section of the community and incorporate ideas from customers to improve design of the program. The company also created a Sustainability Hub on Worcester's Main Street. The Hub is a storefront location staffed by National Grid employees and knowledgeable intern ambassadors from nearby universities that enables customers to obtain assistance with communications and behavior tips for actions during demand response events, see technology demonstrations, and access other resources on sustainability practices. Staff and interns also promote the program and assist customers at many outreach and community events. Over 8,000 people have visited the Sustainability Hub since its opening in 2013 and many participants have cited the Hub as a useful source of information, alongside direct mail, the program website and National Grid's Contact Center.
A second defining feature of Smart Energy Solutions was customer options. SES was offered on an opt-out basis, meaning that its participants – a mixture of residential and commercial customers totaling 15,000 meters – were selected by National Grid and provided with a smart meter and a dynamic pricing rate by default. Customers who were reluctant to participate were given the option of declining the meter, or accepting the meter but remaining on a general service rate. Customers could also enroll with a third party competitive supplier at any time, although that would disqualify them from SES participation.
Those customers that accepted the smart meter then chose from a menu of no-cost in-home technology options, with the default being access to a web portal with usage information and resources. Participants who wished to engage further chose from an in-home display/digital picture frame, a programmable-controllable thermostat (PCT) with mobile app for homes with central air conditioning, smart plugs, and optional direct load control devices for water heaters and pool pumps. Approximately 10 percent of customers opted-in to one or more of the in-home technology options, with a majority of those installing the in-home display and approximately 300 customers utilizing a PCT.
Participants were also encouraged to choose a pricing plan. The default rate, referred to as Smart Rewards Pricing (SRP), combined a time-of-use (TOU) rate with a critical peak rate that came into effect only during Peak Event hours. The time-of-use element of SRP featured daytime rates slightly lower than general service and even lower evening and weekend rates, while the critical peak rate was several times higher than general service but in effect up to a maximum of 175 hours per year. SRP customers also received bill protection, meaning that their total annual bill was guaranteed not to exceed what they would have paid on basic service. The alternative to SRP was a Conservation Day Rebate pricing plan, in which customers stayed on the general service rate but earned a rebate when the reduced their usage below their normal usage during Peak Event hours. Customers were also able to switch between pricing plans one time, or opt out of SES pricing altogether by adopting the general service rate. Contrary to initial expectations, a large majority (over 90 percent) of customers opted to remain on the default Smart Rewards Pricing plan.
Continuing to apply the “listen, test, learn” approach, the pilot’s second year included a number of exciting new features and refinements. Having learned in Year 1 that getting customers engaged delivered savings for the grid and for customers, National Grid added an online rewards platform that challenged participants to take a variety of actions (e.g., signing up for an online account or an in-home energy assessment) in order to earn points that were redeemable for gift cards and other prizes. “Energy Signatures” were introduced in order to help customers self-identify with their energy usage patterns and select the most effective savings strategies for their households. Peak event characteristics such as duration, start and end times, and thermostat degree setbacks were modified in order to try to optimize customer response. Finally, responding to customers’ concerns about Peak Event communication, National Grid promoted the available communication customization options and discontinued day-of-event reminder phone calls.
After two years of implementation the program maintained a very high participant retention rate of 98 percent. National Grid tracked the numbers of "active" customers as well. Almost 20 percent of customers qualified as "active" at the end of the first year, meaning that they had opted into one or more of the available in-home technologies and/or logged in to the web portal at least once, and that number grew to 25% in the second year. Participant satisfaction was also strong, with 69% of survey respondents rating their satisfaction at least a 5 on a seven-point scale. Over two-thirds of participants would like to continue in the program, and most would choose to stay on their current rate if the program were extended.
Demand savings surpassed the program’s goals, with active customers averaging 17% demand reductions during the 20 peak events called each summer. Peak event savings averaged across all customers increased from 3.9% to 7.2% in the second year, suggesting increasing levels of engagement across the board. Energy savings also increased in the second year, growing from 4.3% to 6.3% amongst active customers and from 0.2% to 2.0% for all customers. As for bill savings, participants collectively saved a total of $1.77 million, with customers on Smart Rewards Pricing averaging $236 in savings over the two years and Peak Time Rebate customers receiving average rebates totaling $30.