Demand Response: Smart Thermostats Getting Results at SCE

By Mark S. Martinez, Southern California Edison, & Frank Russell, MeterSmart

In California, the state’s utility commission and large investor-owned utilities such as Southern California Edison (SCE) have a common interest: ensuring electric reliability. They work together in developing a secure infrastructure and creating programs that help customers both save energy and reduce the demand for electricity during peak periods.

Click here to enlarge image

From a resource perspective, we in the energy business would rather control energy demand during peak periods than let energy demand control us. When energy peaks occur that threaten reliability or cause wholesale price spikes, we would rather turn to our demand response resources that reduce customer load than turn on a switch to a power generator. Deploying a customer demand-side resource option can be cost-effective, environmentally friendly, and as dispatchable as a power plant.

Reliability was the goal in 2001 when the California Public Utility Commission (CPUC) directed the state’s large investor-owned utilities to embark on their own respective demand response initiatives and measure the results. Legislation created from the state’s experiences in the energy crisis of 2000 enabled the CPUC to create many energy-related initiatives. Today, this directive has resulted in one of SCE’s most successful demand response programs to date.

As a result of Assembly Bill 970, the state commission gave SCE authority to administer and measure the effectiveness of the SCE Energy$mart Thermostat pilot program, which is a demand response project aimed at small businesses in the SCE service area. The program was designed to provide demand-responsive load reduction through adjusting air conditioner thermostats. Verification of the load impacts was an important aspect of the program, as the costs of the project are measured against the benefits, which include peak period demand reductions in energy.

Setting Customer Expectations

Commercial and industrial customers expect reliable service at a reasonable price from their utilities. But, when a utility tries to manage its consumption of energy through demand response techniques, it must educate customers on the necessity for these measures, and manage their expectations for price-benefit trade offs. The “win-win” scenario must apply for effective program deployment.

Some of the most easily understood and customer-accepted utility demand response programs follow seasonal energy usage patterns. The programs are most useful and often deployed during the hot summer months in Southern California. To design effective programs, we conduct load research using meter data to track commercial and industrial customers’ summer and winter peak usage. This varies depending on the location. There are at least six significant climate zones in the SCE territory, each with its unique relationship to customer energy usage.

SCE customers with air conditioning usually pay higher electric bills in the summer, and, as a result, understand their own demand for cooling during the core summer months. They are more willing to participate in a program that can help them save money, and, as we’ve seen in recent years, avoid energy crises or blackouts. When a demand response program proves its effectiveness, it’s because the utility is seeing energy demand reductions, and customers are seeing lower energy bills.

Measuring the Impacts

For the SCE Energy$mart Thermostat program, SCE needed to verify the load impact of a two-way programmable thermostat connected to the Internet and controlled via radio. Customers were offered a cash incentive for participation, and the incentive was reduced if the customers did not allow the thermostat to reduce their air-conditioned usage. This arrangement enabled us to remotely control the temperature by between 2 and 4 degrees Fahrenheit with a goal of reducing energy consumption overall for the program by 4 MW during peak summer usage times.

For the verification, SCE partnered with MeterSmart, a metering and energy data management service provider, to install interval data recorder (IDR) meters in parallel with the utility billing meter so that daily energy data may be remotely monitored. The parallel meter arrangement eliminated the need for a potential service interruption during a meter replacement. Plus, meter installation did not affect customers’ billing cycles.

In each customer facility, the telephone line was shared between the customer and the meter, ensuring the retrieval of timely metered data remotely on a daily basis. MeterSmart also continues to manage the data collection, validation, analysis and reporting services, as well as display the results for SCE on the web.

By the end of 2002, SCE had installed approximately 4,600 of these “smart” thermostats at 2,600 small businesses throughout Southern California, and was conducting tests where they were remotely controlled by the utility. The energy data management system was installed in 2003 at a sample of customer sites. It measured the customer’s interval usage data and confirmed the magnitude and timing of reductions in energy consumption during the 2003 control periods.

As part of its demand response pilot program, SCE partnered with MeterSmart to install interval data recorder (IDR) meters in parallel with the utility billing meter so that daily energy data could be remotely monitored.Click here to enlarge image


Program Success

At its midway point at the end of 2003, the SCE Energy$mart Thermostat project had already achieved some intriguing results. More tests were conducted during the summer, and the metered data collected by MeterSmart showed a 10 MW instantaneous reduction of demand, leveling off to 7 MWh for a one-hour period, based on 4,600 controlled thermostats at a 4-degree setback. This initial load dispatch is more than double our 4 MW goal, and is sustained without the need for “turning off” or cycling the air conditioner. This is much more acceptable to the customer, as interior temperatures do not become uncomfortable.

The key to measuring and validating the load impacts from this program has been the effective use of the sample of load research meters and the dynamic data analysis. The ease with which the hardware was installed, as well as low intrusiveness for the customer has helped SCE demonstrate program effectiveness to regulatory agencies in a cost-effective and customer-friendly manner. SCE used a project “turnkey” approach, where MeterSmart was responsible for customer recruitment, hardware installation, data collection and analysis.

The use of industry-standard equipment and infrastructures was also essential for success. Compatibility between metering and software under a single service provider means utilities no longer face the burden of trying to maintain multiple platforms for reading interval data; it can all be done on a single platform. This, coupled with the fact that a vendor’s submetering falls within the requirements of meeting billing accuracy standards, makes the submeter a highly useful tool in the electric utility industry for load research.

In summary, knowledge about energy usage is the common denominator in understanding how and where to reduce peak demand. The net result is lower utility operating costs and lower customer energy bills through effective demand response programs. We may also prevent the next energy crisis in California.

In every case, a utility and its stakeholders will have specific questions to answer about the impact of demand response programs uniquely related to energy usage. But, getting the answer to the question can be challenging—unless you gain detailed knowledge about the customers’ energy usage through an effective and accurate energy data management system that delivers timely and reliable energy use information.

Mark S. Martinez is manager of demand response program development at Southern California Edison, one of the United States’ largest investor-owned electric utilities.

Frank Russell, western regional utility sales manager for MeterSmart, L.P., a Hunt Power company, has more than 30 years of experience in technology development and sales, including residential and commercial AMR, load research and submetering, as well as commercial and industrial interval data collection.

Previous articleELP Volume 82 Issue 5
Next articleCapgemini Energy opens doors for business
The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

No posts to display