Energy Program Continues to Receive Praise
The Community Energy Cooperative’s Energy-Smart Pricing Plan continues to draw the attention of many in the energy industry for the program’s innovative structure and findings. The program is testing whether consumers will shift their electricity demand if given access to price signals and richer information. Findings are showing that consumers will indeed change their behavior–saving them money and simultaneously helping the utility better manage overall demand. Last year, Nobel Laureate Vernon Smith, a professor at George Mason University, hailed the program as a national model for electricity demand reduction. Read what industry publication Restructuring Today had to say…
Chicago Co-op’s Pilot Real-Time Pricing Leads to Savings
Restructuring Today
May 5, 2005
Myth of apathetic power conservers debunked
Here’s powerful proof even consumers can manage their energy use and save money when given the right price signals.
The Energy Smart Pricing Plan — Community Energy Co-op’s innovative real-time price RTP pilot in Chicago now in its third year — is delivering hefty demand shifting to Commonwealth Edison and savings to happy customers.
ESPP has 1,400 residential customers and 99% say they’re saving money, based on analysis by Summit Blue Consulting.
Two-thirds feel they’re doing something good for the environment.
And they’ve changed their energy use.
Despite one of the coolest summers in 25 years, Summit found customers showed the same interest in adjusting their use as the hotter summer before.
Customers responded that their interest in adjusting to prices persisted beyond the initial period — an unexpected result.
Most used air conditioning less and some used fans to set AC lower and shifted the time they do laundry and reported being extra conscious of turning off lights and blocking sunlight with shades.
The pilot tests the theory that residential customers can’t respond to hourly prices, disproved in the first year and rendered a myth by the second.
A cross-section of the public took part including apartment dwellers and single-family homeowners, people with and without air conditioning central and window units, high income and low, said Summit.
The program is deliberately low tech.
Customers get simple interval meters that record hourly use but don’t have deluxe two-way communications.
Most other pilots use expensive meters that eat up some of the savings customers might realize from changing their habits, Summit noted.
Other pilots test time-of-use bands and critical-peak pricing, the firm added, making ESPP’s hourly prices unique.
Customers are given access to day-ahead prices on the co-op’s website or by phone and get a phone call or email when prices rise to 10¢/kwh or more for at least an hour.
The co-op bought a hedge that caps prices at 50¢/kwh no matter how they might soar.
Customers get data on their power use and tips on how to keep their bills down.
Kathryn Tholin, general manager at the co-op RT, 12/3/02, deliberately kept the pilot simple, testing the premise that given the right data, people would act in their best interests even without expensive gadgets.
“This program gives consumers more options and it lets people take greater control of their bills,” Tholin said.
“People are saving money, they’re changing the way they use energy in positive ways and they’re happy with the program.”
Average savings are 11% compared to standard residential rates, she said, over the first two years, plus real use shifts that benefit all consumers and reliability.
An extra bonus?
Customers are replacing old, inefficient appliances at a “very high rate” — 90%.
State lawmakers, regulators and utilities are eyeing the program as a candidate for getting consumer choice moving, the co-op said.
Illinois residential customers are allowed to shop but none have except for the co-op’s customers.
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