Steve Smith, Honeywell Utility Solutions
Not long ago the energy market in Ontario, Canada, was at a crossroads. Electricity demand far outpaced supply as the population grew and generation capacity decreased. Driven by this less-than-ideal reality, the government sought to reduce peak electricity demand and foster province-wide conservation.
In response, six of Ontario’s largest local electric utilities formed the Coalition of Large Distributors (CLD) and embarked on conservation and demand-side management initiatives.
One of the coalition’s participating utilities, Hydro Ottawa, exemplifies these efforts with its demand response program.
Lightening the Load
In 2006 participating CLD utilities including Hydro Ottawa implemented peaksaver, a pilot program designed to help tackle electric capacity constraints with load-shedding measures for residential and small commercial customers.
These demand response efforts were fairly new in Canada, and the pilot programs tested the concept from a technological and voluntary customer buy-in standpoint.
The pilot program aimed to shift energy use from peak to off-peak periods, thereby reducing the grid’s energy constraint and ensuring sustainable energy supply. For a summer-peaking utility, this typically occurs on the hottest days when air conditioning use strains the power grid and increases the potential for brownouts and blackouts.
Overall, the success of the peaksaver program is defined by the following equation:
Peak load reduction = kilowatt reduction per device x number of participants
Because the savings per device is constant, the variable in the formula is the number of homeowners and businesses that agree to enroll. Hitting load-reduction targets depends on capturing ratepayers’ interest and maximizing participation and post-installation support to ensure ongoing participation.
By offering participants a free, professionally installed, programmable thermostat, the pilot phase drew enough customers and hit its early installation targets. Hydro Ottawa’s pilot program, targeted toward western Ottawa communities, resulted in 1,500 thermostats installed in about four months.
The Next Step
When Hydro Ottawa embarked on the next phase of peaksaver in 2007, it sought to reach a larger audience to achieve more aggressive enrollment goals. The efforts of 2007 marked the beginning of a full-fledged program, and the utility re-contracted with Honeywell to move from the initial pilot to full-scale program delivery.
“Many factors come into play when delivering a successful demand response program, and the overall picture only becomes more complicated as the scope and target customer base increases,” said Bruce Bibby, manager of conservation and demand management at Hydro Ottawa.
In its role, Honeywell introduced a comprehensive approach that integrates three areas critical to program delivery: marketing, customer service and field operations. Specifically, these areas comprise measures such as program marketing, data collection and reporting, as well as staffing and running a call center for customer inquiries and providing warranty support.
Hydro Ottawa, however, still faced reaching and enrolling customers who had little knowledge or background on demand response programs.
“The customer is the critical link for a demand response program, so without that piece, nothing else really matters,” Bibby said.
To address this challenge, a mix of traditional and innovative tactics was introduced, including coordinated event marketing and locally branded direct mail pieces. Most notable, however, was the addition of an appealing customer incentive: a new demand response thermostat.
“Many people enrolled in the program simply because of the compelling offer of a free thermostat, even if they didn’t quite understand all of the ins and outs of demand response,” Bibby said.
With Honeywell’s UtilityPRO, program participants receive a free, programmable thermostat with intuitive touch-screen interaction, online programming capabilities to adjust settings via the Internet and a large, easy-to read, backlit display.
The thermostat also could enable greater interaction between Hydro Ottawa and customers by providing two-way, smart grid-enabled communications in the future. This would allow the utility to send and receive information from the thermostat. For example, Hydro Ottawa could provide up-to-date billing data, including current rates, month-to-date charges and year-over-year use comparisons to help drive smarter customer energy use.
Equally critical to the success of the peaksaver program is the behind-the-scenes work. Honeywell manages and establishes the link among field operations, customer service, marketing and incentives. In addition, Honeywell also helps maintain the integrity of the data gathered by the program’s back-end systems. Its responsibilities extend to the Hydro Ottawa customer base, where the company manages recruitment, installations, data collection and reporting, and warranty support. Honeywell maintains these customer relationships by managing and staffing a call center to field customer inquiries, including those received during curtailments.
Overall, this close coordination helps ensure peaksaver has the appropriate resources and staffing levels to efficiently and effectively meet the needs of Hydro Ottawa and its customers.
Now in its fourth phase that began in early 2009, the peaksaver program has helped reduce more than 10 MW of peak-energy use, made possible by the more than 16,000 thermostats Honeywell installed.
Hydro Ottawa continues to draw customers through its marketing efforts, including TV and bus ads, among other traditional measures.
Most critical, however, is the attention paid to customer service and support from the initial customer sign-up phase to long after a customer’s thermostat is in place. Hydro Ottawa credits Honeywell’s attention to these aspects as a key factor in compelling customers to enroll and then maintaining customer satisfaction.
“This program amounts to more than just a quick sign-up and install process, and customers value that long-term investment in good service,” Bibby said.
Through its call center support, Honeywell also tracks customer satisfaction to ensure it remains above a certain level—a benefit to participating customers and Hydro Ottawa.
“Keeping a close watch over customer satisfaction levels benefits all sides and makes good financial sense,” Bibby said. “It’s important that we focus on good customer service if we want to better manage energy demand. Without satisfied customers, initiatives like the peaksaver program won’t last long.”
Based on recent call inspections to measure satisfaction, the companies are following through on this notion. When surveyed, 90 percent of participating customers defined service as “excellent.” Other notable findings included high ratings for staff knowledge, with 99 percent of those surveyed calling it “good” or “excellent.” Feedback like this provides support for why peaksaver has been able to grow and demonstrate continued success.
Using peaksaver, Hydro Ottawa is helping the province tackle sustainability and address peak-load issues by providing customers with valuable insight to better manage their energy use and prepare for proposed ptime-of-use rates. Hydro Ottawa is well-positioned to continue fostering conservation and smart energy management among its customer base, thanks to its marketing and communications connections.
Smith is the director of sales and marketing for Honeywell Utility Solutions, which designs and implements demand response programs for utilities. Reach him at email@example.com.
More Than 50 Percent Want Electricity Usage Data Displayed in Homes
A recent U.K. consumer survey from IMS Research found that more than half of respondents consider displaying current electricity usage information in their homes “very useful.” More than 90 percent considered it “very” or “somewhat” useful.
This consumer survey analyzed the attitudes and expectations of 1,000 respondents (500 in the U.K. and 500 in the U.S.) to find their views on smart home energy management functions, including attitudes to demand response and willingness to pay for remote home management functions.
“Increasing environmental awareness, the rise of Web portal-based household management services and the rollout of smart meters are all driving increasing interest in smart home energy management systems,” said Lisa Arrowsmith, market analyst at IMS Research.
Some findings from the consumer survey were somewhat expected. For example:
- Older respondents are less likely than younger respondents to display household electricity data on their cellular handsets, and
- Early adopters are most likely to pay willingly for remote home management services such as controlling home temperature online.
IMS Research is a supplier of market research and consultancy services on global electronics markets. The company headquarters is in Wellingborough, U.K., with offices in Austin, Texas, and Shanghai. For more information, visit http://imsresearch.com.