Most electric power utilities are involved in smart grid programs. Smart grid programs involve smart meters, bidirection communications networks, time of use pricing, self-healing distribution networks, demand response, substation automation, distributed generation, and so on. But in many countries the focus has been primarily on programs that directly impact the consumer, because ultimately the consumer is going to pay for smart grid.
The Department of Energy (DOE) announced in 2007 as part of the Energy Independence and Security Act and refinanced in 2009 as part of the American Recovery and Reinvestment Act a grant program called the Smart Grid Investment Grant Program (SGIG). There were two types of funding for this program, smaller projects in which the federal share would be $300,000 to $20,000,000 and larger projects in which the federal cost share would be $20,000,000 to $200,000,000.
The Department of Energy’s Office of Electricity Delivery and Energy Reliability is requiring some utilities receiving ARRA SGIG funds to survey how consumers are responding to smart grid technologies. One of these is Oklahoma Gas & Electric (OGE), who received a $130 million ARRA SGIG grant. OG&E is in the middle of a three-year deployment of smart grid technology across its service territory which includes the installation of smart meters, a secure wireless network and smart equipment on its distribution system to increase reliability and reduce operational expenses.
OGE is currently conducting a consumer survey with help from Lawrence Berkeley National Laboratory and the Department of Energy. OGE’s study is looking at smart consumer devices, time of use pricing and customer education to understand how consumer electric power consumption patterns can be changed. Pilots in other jurisdictions have shown that peak demand can be reduced significantly by a combination of smart meters and time of use pricing.
The first phase of OGE’s study involved about 2500 volunteer residents and small businesses who participated in OGE's time of use pricing programs. Customers were provided with smart thermostats, access to Silver Spring’s web portal, CustomerIQ, and home energy displays. Participants were divided into two groups. One group saw a fixed price difference between peak ($0.23 per kWh) and off-peak ($0.042 per kWh) pricing. The other group was on variable peak pricing, which was set the day before, and could change hourly between $0.045 to $0.46 per kWh. It was found that participants in the Variable Peak Pricing program used much less electricity when prices were high. For this group, average peak period electricity use was up to 33 percent lower during high price periods. This is a dramatically greater reduction in peak power demand as a result of time of use pricing than has been found in other jurisdictions but similar to other pilots with smart themostats and time of use pricing.
OGE also found that involving customers through outreach education and focus group dialogues was an important component of a consumer focussed peak energy reduction program.