New Orleans' Peak-Time Rebate a Strong Draw for Low-Income Customers
No matter how much customer engagement is talked about, many utilities seem to have trouble effectively interacting with their residential customers, and even more so with low-income customers.
But the results from one pilot funded by the U.S. Department of Energy’s Smart Grid Investment Grants found that at least one pricing plan enabled by smart meters was incredibly well received by low-income customers.
The results from Entergy New Orleans, which serves about 169,000 customers in Louisiana’s largest city, are just another feather in the cap for peak-time rebate programs, which are gaining traction with utilities that have invested in smart meters.
The pilot received about $5 million in stimulus funds for a $10 million project and installed smart meters for 4,500 customers. Customers not in the control group were given access to an online web portal, and then were given either direct load control devices or in-home displays, or were enrolled in a peak-time rebate program.
Entergy New Orleans serves a large low-income population, numbering about 50,000 customers. The utility defines this group as customers whose incomes are less than 80 percent of the area’s median income. “We knew the demographic [would be] a hard group to reach,” said Brandi Schmitt, project manager at Entergy NO, who recently presented some findings from the pilot at an IEEE meeting.
The utility reached out to customers through a variety of media and partnered with community outreach nonprofits to enroll participants. Customers could choose between receiving an orientation training session in person, over the phone, or via mail or internet. Schmitt said the utility predicted that many customers would want to do an in-person training session, but it was eventually discovered that more preferred a phone session. Entergy New Orleans also set up a dedicated call center for the pilot.
The program ran for the summer of 2011, and the peak-time rebate continued in summer 2012. Customers in the peak-time rebate program received a $0.235 per kilowatt-hour rebate for three-hour blocks on peak demand days (usually about twenty days per summer). Customers with AC load control had their compressors cycled at 33 percent for the same three-hour block.
Direct load control resulted in the greatest perceived energy savings, but had the same percentage of participants who achieved actual energy savings. The in-home display also saved energy for nearly two-thirds of participants, but some long-term studies have found that in-home displays eventually end up in kitchen drawers; for the most part, the devices have not been widely adopted beyond pilots.
Not only did two-third of customers save energy with the peak-time rebate, but 96 percent of peak-time rebate participants said they would like to be part of the program on a permanent basis.
It would be difficult to find any other utility program that has a 96 percent approval rating from residential customers, and yet Entergy New Orleans is still evaluating what it will do now that the pilot is over.
Other utilities, such as Baltimore Gas & Electric and San Diego Gas & Electric, have expanded their peak-time rebate programs. BGE is enrolling its entire residential customer base in such a program as it deploys smart meters across its territory.
Entergy New Orleans, however, has no plans yet for a full rollout of smart meters, which are needed to track a customer’s energy use during peak-time rebate events. The New Orleans utility is controlled by the city council, rather than the state’s public utility commission. The city already replaced most of the city’s meters after Hurricane Katrina, so a request to upgrade again less than a decade later would be unlikely to get approved.
“We’re in the middle of seeing where we go from here,” said Schmitt. The utility has already invested in the back-end systems for peak-time rebates and the backbone of a communication network that could be used by meters across the city.
Much has changed between 2009, when Entergy New Orleans applied for the pilot funding, and today. Large-scale smart meter deployments have slowed in the absence of federal funding to help defray the costs, but some utilities are still moving forward, drawing lessons from those that did get DOE funding.
Also, some technology vendors are no longer looking to work with utilities that are seeking to develop pilots to nowhere, a common practice in the industry. Many programs, such as peak-time rebates or home energy reports, have now been implemented successfully by a significant number of utilities and arguably do not need to be retested by every utility before deploying. Instead, conducting a small pilot to work out technology issues can be the precursor to a larger program.
Consumer programs have also become far more sophisticated in just the past five years. Today, many offer features such as delivering mobile messaging to customers during peak times or outages, or offering digital, two-way programmable thermostats that customers can control from their phones in exchange for their enrollment in demand response programs.
While Entergy New Orleans’ pilot adds to the body of evidence suggesting that low-income customers benefit from and respond positively to demand response offerings, it also shows the limitations of pilots that do not start with a vision of scaling up.
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