FirstEnergy designed a consumer behavior study (CBS) to inform the development of demand response programs that could be deployed to decrease the state of Ohio’s system peak demand and achieve other goals, such as reduced electricity usage at times when supply prices are high or system reliability is in jeopardy. The focal point was to quantify how residential customers respond to a monetary inducement (Peak Time Rebate (PTR)) to reduce load during pre-specified hours (events) with a day’s advance notice.
In addition, the study evaluated the impacts of two response-enabling technologies, in-home displays (IHD) and programmable controllable thermostats (PCT), on customer response. Only customers identified as having central air conditioning were eligible to receive a PCT. The customers without central air were eligible to receive an IHD.
Two novel aspects were included to resolve important ambiguities about how customers respond to PTR-type incentives. First, at the beginning of events (hot summer days) FirstEnergy sent a signal to PCTs for two of the treatment groups that raised participants’ thermostat setting three degrees. The third PCT treatment group was notified of the PTR event, but it was each participant’s choice whether to make a PCT adjustment. Second, customers in the utility-initiated PCT treatment were partitioned in terms of the event duration, four or six hours (event duration treatments). All treatment customers had the ability to opt-out of any PTR event, the utility-initiated ones by pushing an override button; relatively few elected to do so.
The figure below portrays the experimental design. Control groups (cell A 1-2 and A3 in the figure) were filled by random assignment. The treatment groups were populated through recruitment. Offers were extended to eligible customers, separately for the three PCT and the single IHD experiments, until the desired number of subjects was achieved or the customer pool was exhausted. Customers electing to make PCT adjustments themselves were assigned randomly to the four-hour treatments (cell B1). Those that elected utility-initiated PCT adjustments were randomly assigned to the 4-hour or 6-hour event duration treatment (cells B2 and C2). All customers in the combined IHD and PTR treatments (cell B3) were exposed to 4-hour events.
Recruitment occurred in the fall of 2011 and winter of 2012, after which the technology was deployed. PTR events (15) were called from June 1 to August 31, 2012.
FirstEnergy commissioned EPRI to conduct a preliminary CBS analysis using hourly metered data for June-August 2012 from 976 customers in the pilot (control and treatment groups) and demographic and premise data from a survey administered in the fall 2012.
EPRI conducted a series of analyses initially involving graphic depictions of the customer usage by treatment cell, and then by applying structured models, fixed effects and electricity demand, to the data to quantify the impacts, event percentage load reductions and price, elasticity of the treatments.
PTR resulted in significant usage reduction during events (15 were called). The average hourly reduction was approximately the same for the 4-hour and 6-hour treatments. The reduction was considerably lower, but still statistically significant, for the group of customers that managed the PCT themselves during events. The group that received an IHD and were offered PTR payments exhibited a load reduction similar to that of the self-managed PCTs.