Portland utility proposes $1/kWh incentive for residential peak shaving

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Portland General Electric (PGE) has proposed a residential demand response program in which 20,000 customers would receive $1.00 for each kilowatt-hour of reduced electric use at the highest peak demand periods, measured relative to each customer’s baseline energy use. The Oregon Public Utilities Commission (PUC), which directed PGE to develop a demand response program, is reviewing the proposal.

The PUC has also directed PGE to acquire demand response capacity of at least 77 MW (winter) and 69 MW (summer) through 2020, and to work to reach demand response capacity of 191 MW (winter) and 162 MW (summer).

Demand response in general may complement solar power by shifting some electricity consumption to times of greater solar generation.

Under PGE’s proposal, the utility could offer a peak time rebate if energy load is forecasted to be in the top 1% of annual load hours; the temperature is forecasted to be above 90 degrees or below 32 degrees; market power prices are expected to be high; and/or wind generation is forecasted to be low or transitioning.

PGE stated in a press release that it would help customers automate their smart devices, such as thermostats, water heaters, electric vehicle chargers, and batteries “to work in concert with PGE as it operates the grid.”

PGE would decide by 4 p.m. each day whether to offer a peak time rebate the following day. Customers could elect to learn of rebate periods by email, text, or phone. Or they could randomly reduce their consumption at peak periods and still receive the incentive.

Eligible residential customers would be those served by three PGE substations in Portland, Milwaukie, and Hillsboro. PGE expects that by making all customers in the three pilot zones eligible for rebates, unless they opt-out, the utility may achieve at least 66% participation from eligible customers, versus what it says is a typical demand response participation rate of less than 7%.

PGE also proposes to permit residential customers in the pilot program to authorize the utility to automatically reduce their consumption during peak periods, in exchange for a lower rate structure. PGE’s regulatory filing states that the pilot program will test approaches to motivate customers to choose this option.

PGE credited the Rocky Mountain Institute (RMI) with providing guidance in developing the pilot program. RMI provided facilitation services to support program development, bringing together representatives of PGE, the Oregon PUC, Pacific Northwest National Laboratory, Northwest Energy Efficiency Alliance, Energy Trust of Oregon, and the Oregon cities of Milwaukie and Hillsboro. The PUC had directed PGE to work with PUC staff to “establish, manage, and support a Demand Response Review Committee to assist in the development and success of PGE’s demand response activities.”

Milwaukie’s mayor and the City of Portland have submitted letters to the Oregon PUC in support of the proposed program. PGE aims to launch the program on April 1 or shortly thereafter.