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Dear ADS Member,

Registration is open and a preliminary list of speakers has been announced for the the 9th annual National Town Meeting on Demand Response and Smart Grid, which is taking place June 26-28 in Washington, DC!

ADS members are entitled to discount registration rates, so register today. We look forward to seeing you in June!

April Newsletter
In this newsletter you will get an update on what ADS members and staff have been working on with DOE and FERC in regards to the National Action Plan on DR and Program Design and Implementation.  You will also learn about Energate, one of the newest ADS Group Members, and hear from ADS' Vice Chairman, Larry Oliva of SCE about his time in the industry. Finally, you will hear about why DR may need to gear up for battle.
The links below will take you directly to these stories.  Check them out, and encourage your co-workers and colleagues to join ADS  so they can hear more about what we are doing.

ADS Projects - NAP Program Design and Delivery Working Group Update

Member Spotlight - Energate

Is DR Headed for the Hunger Games? - Dan Delurey

Interview with Larry Oliva of SCE

Update from the NAP Program Design and Delivery Working Group

As you have heard about through ADS member emails and on monthly “Drop-In Calls,” ADS has been working with DOE and FERC on a project related to the National Action Plan on Demand Response (NAP). ADS is spearheading the Program Design and Implementation Working Group, and has been making progress on the project.

The first meeting of the Working Group was held earlier this month, and Group members also submitted input through an internal survey about the goals for the project and suggestions for what output would be most useful to DR and smart grid practitioners around the country.

The Working Group is planning a series of “Case Study Interviews” conducted with utility Program and Product Managers that will produce audio podcasts and transcripts detailing lessons learned and best practices. These will be designed to help and advise other DR and smart grid practitioners who are in the midst of designing their own programs and projects.

In addition, the Working Group will conduct an external survey that will serve to capture lessons learned from a broader swatch of DR practitioners and experts and package and distribute those survey results into the public domain.

Finally, Phase II of this project will synthesize the findings from both the interviews and the survey to help design and develop a toolkit, similar to that developed under the National Action Plan on Energy Efficiency, to instruct and guide practitioners in their own program design.

If you are interested in joining the Working Group, please contact Jenny Senff  to find out how to get involved.

Member Spotlight - Energate

Energate, Inc. is a privately-held company headquartered in Ottawa, Ontario with offices in California, Illinois, Texas, and Toronto. The company was founded in 2004 with a team of executives from Enerstat who had extensive experience with digital control of HVAC equipment using digital thermostats. 

Today Energate is a leading provider of demand response and home energy management solutions that include smart thermostats, consumer energy displays, load switches, wireless communications, broadband gateways, and utility software. The company’s Consumer Connected Demand Response™ platform allows utilities to implement residential demand response programs, and empowers consumers to more effectively manage their energy usage. 

Energate’s solutions have been a part of residential demand response trials and pilot programs at over 25 utilities in North America. Some of these pilots have progressed to full-scale roll-outs, including two of the largest production programs to date at Oklahoma Gas & Electric (OG&E) and the Ontario Power Authority (OPA). During the OPA pilot, for example, residents were able to reduce their electric utility bills by as much as 30 percent by utilizing simple control settings on Energate’s smart thermostats. 

At OG&E the pilot project enabled residential consumers to achieve a peak reduction of just over 1.9 kW per home, far surpassing the utility’s target of 1.3 kW. OG&E is now pursuing what is considered to be the industry’s largest scale production roll-out to some 40,000 residences. Participants will receive an Energate smart thermostat that will respond (according to customer settings) to the dynamic pricing signals sent via OG&E’s advanced metering infrastructure. 

Ontario’s residential demand response program includes smart thermostats, load control switches, and consumer information displays with multiple communications options, along with comprehensive management software for the utility. The successful pilot enabled participating residents to control their home energy utilization via the Internet. The program is now available to all of the province’s local distribution companies, as well as through other provincial aggregators. 

While Energate is a relatively new company, its roots run deep. One of the company’s co-founders is Jerry Kathnelson. Kathnelson worked at the National Research Council Canada (NRC) during the oil embargo of the 1970’s when he saw the need for a more sophisticated approach to residential energy management. He left the NRC to co-invent the industry’s first digital thermostat, which was which was commercialized by Enerstat in 1979. 

Some of Kathnelson’s pioneering work remains in Energate’s latest generation of smart thermostats: the Foundation™ Home Energy Gateway. These include a liquid crystal display (LCD), a processor and RAM, the ability to “steal” power from the HVAC system, and user-friendly algorithms for balancing comfort with cost savings. Subsequent generations had much larger displays and processors, of course, along with more RAM and networking capabilities. 

Ease-of-use remains important for balancing comfort with cost savings, and this philosophy is embodied today in Energate’s current generation of smart thermostats. The simple user interface is like the familiar dial on an old-fashioned thermostat, enabling customers to “crank down” the cost or “crank up” the comfort - or choose something in between favoring either cost or comfort. For enthusiasts, much more granular settings can be programmed, including for other electric loads, such as water heaters and pool pumps via separate load control switches. 

Energate has made numerous contributions to industry initiatives, including to the Smart Energy Profile (SEP) created by the ZigBee Alliance in 2005, and was subsequently selected in 2009 by the U.S. National Institute of Standards and Technology (NIST) for residential demand response in the Smart Grid Interoperability Standards Framework. One of Energate’s contributions was the ability to have more than one Energy Service Interface (ESI), which is by default in the smart meter. Another contribution was in the area of SEP test cases. As a provider of both ESIs and smart thermostats, Energate’s experience in SEP client/server interaction has helped improve testing, and therefore, interoperability. 

Energate’s current Consumer Connected Demand Response™ (CCDR) product line provides a complete home energy management, demand response and direct load control solution for utilities and their residential customers. CCDR enables two-way communications from the utility to the consumer via an advanced metering infrastructure or a secure broadband Internet gateway, as well as one-way communications by radio pager networks (normally only for direct load control). 

Energate’s most recent and advanced offering, the Foundation Home Energy Gateway, is the result of over three years of consultation with the company’s utility and technology partners. This next-generation platform’s architecture is fully extensible, possessing ample memory and CPU power to support new applications and major upgrades, including the eventual migration from 1.x to SEP 2.x. An over-the-air upgrade capability enables new software and applications to be installed remotely and transparently by utilities, while an integral USNAP (Universal Smart Network Access Port) slot enables plug-in support for additional networks, such as Wi-Fi or cellular. Together these features provide an unprecedented level of investment protection for utilities and their residential consumers. 

To learn more about Energate, visit their website.

Is DR Headed for the Hunger Games?

    By Dan Delurey
    ADS Executive Director

   Since modern DR became the new kid
   on the electricity block, it has by many
   measures done very well for itself. Just
   look at the success of DR in the Eastern
   regional wholesale market. Look at
   what is being harvested in California.  Moreover, DR has repeatedly and increasingly been ratified as being “the real thing” (i.e. it can be relied upon, it shows up on time, it is as good as generation, etc.).

As a result of DR’s success, some places are seeing fewer MW being generated and sold into markets. That’s right. DR has become a real market competitor, where negawatts are successfully going up against megawatts. There is no greater evidence that this is now the case than that of the new more aggressive (and legal) approach being taken by the generator community against some of FERC’s recent moves to value and advance DR.

So what is happening that might be a countervailing force against DR?

Well, some states seem to be getting queasy about the levels of DR that are starting to pile up in the resource mix. I say queasy because it seems to be a gut feeling that many are having that as times get tough, only generation can be considered equal to putting one’s funds into gold. They seem to be quickly pushing a panic button – and talking about generation being the only way to address decreasing reserve margins.

And then there is the matter of the old kid on the block who has been working out in the gym and now has fresh muscles to flex. I talk of course of Natural Gas. Prices appear to be poised to go lower than anyone could have expected just a few years ago. Every new major generating facility on the drawing board or under construction is gas-fired.

Let’s now turn to the size of the overall kWh/kW pie and what factors might have caused it to be smaller now than it could have been. The obvious one is the economic downturn. It is no secret that electricity production/consumption is tied to how robust the economy is. The less obvious one is energy efficiency. The fact is that EE has worked – especially in the case of appliance and equipment standards.  

But we are still a society and economy that increasingly is becoming electrified, right? 

Let’s assume that there is a robust “snap-back” of economic growth. Let’s also assume that the electricity pie steals from other pies – transportation for example. Under this scenario, the electric pie is growing and everyone could theoretically get a larger slice without anyone losing anything, right?

Maybe not.

Even if the electricity pie gets bigger, it may be that DR has peaked – at least for the moment. It may be that gas-fired generation is king-of-the-hill and will be for some time. It will bring prices down and reduce avoided cost and other cost-effectiveness metrics. It will make it harder for all other options to compete in wholesale markets – and that includes DR. It may also be that state commissions and others with jurisdiction over utilities will be under more pressure in the future due to a slow recovery and need to be careful in approving investments and programs. It may be that DR has to work harder to convey and emphasize its many benefits, especially since not all of them show up in the same place, making it harder for the total value proposition to be viewed.  
Don’t think that DR is on autopilot. Don’t assume that its market share of things will increase, even if the pie is enlarged. Don’t even think that the size of its slice will remain the same if the pie stays the same.  

So DR players may very well need to step it up a notch. The DR community may need to get more organized and think and act like a competitor against other options.   

If the DR community wants to avoid hunger, it needs to get ready for the games.

Interview with Larry Oliva of Southern California Edison (SCE)

Larry Oliva also serves as Vice Chairman on the ADS Board of Directors

  How long have you been at
  Southern California Edison?

   I joined SCE 5 years ago in my present
   position. Prior to that, I worked as a
   consultant for SCE on their advanced
   metering program, which began in 2003. I also consulted to SCE in the late 1990s on a major implementation to enable retail energy competition. 

What is your role at SCE?
I am responsible for the operation and development of demand response programs for the company as well as other customer programs that leverage smart grid technologies including advanced metering. I also am responsible for SCE’s customer readiness for new technologies including plug-in electric vehicles and home area networks that link with our smart meter.

How long have you been involved in demand-side activities?
I’ve been devoted to demand-side activities since 2003. I have worked as a consultant for many utilities over a 30-year consulting career covering a wide range of strategic issues including resource planning, economic analysis, system implementation, and rate design. 

What challenges have you faced as a DR professional within your organization and within the industry?
SCE has a legacy of leadership in demand-side management. When I joined the company five years ago, California led the nation in demand-side management initiatives beginning with a state policy for utilities to create a loading order of demand-side management first, renewables second, and then conventional generation technologies. California also led the nation in the first complete implementation of advanced metering by its investor-owned utilities. 

The challenge for me has been to execute innovative programs to make demand response part of our customer’s culture. Advanced metering has been the key. We first began with 15 minute interval metering for all our large customer accounts, which enabled a variety of price-responsive demand response programs, including those that allowed third-party aggregation and DR delivery contracts. Now we are enabling programs for our residential customers as well as rolling out smart metering. Our Save Power Day (Peak Time Rebate) will be a key new program adding to our very successful legacy air conditioning cycling program. 

Another challenge has been to change our air conditioning cycling program to make it an economic resource in addition to an emergency resource. Advanced metering allows us to closely measure the load reductions from the program for dispatch and settlement geographically. 

An ongoing challenge is to maintain the cost effectiveness of demand-side programs in the face of changing market conditions for generation alternatives. Within the industry, we face ongoing challenges by traditionalists at utilities and at the regulatory commissions who do not support demand-side management because of the availability of very low cost generation resources. This is understandable. However, without proper retail electricity pricing or demand-side program options, consumers use electricity in wasteful ways and drive the construction of a network and generation resources to meet infrequent peaks, which is highly inefficient in the long run.  The utility industry load factor is very low compared to other capital intensive industries such as airlines, rail, shipping, hotels, and rental cars. Low load factors eventually lead to higher costs to rate payers and negative regulatory outcomes for utilities. Demand response programs that are cost effective provide important price signals that reflect a utility’s cost and thus achieve higher economic efficiency, resulting in lower rates to customers.

What changes have you seen in the industry as it related to demand-side management?
Clearly, there has been a significant push in many states and at the federal level to encourage demand-side management as a resource comparable to supply-side resources. Smart grid technologies that merge advances in information management, telecommunications, and measurement have spawned tremendous opportunities for better pricing, better management, and innovative new programs for customers. 

Demand response need not be just a reliability program, but rather a daily economic choice. New technologies are available to inform and manage usage for the customer so that DR is automatic via smart appliances, auto DR energy management systems, and mobile apps to monitor/manage HVAC, lighting, home security, etc.  The past 5 years have been very interesting because of these technological developments, but I think the next 5 to 10 years will be amazing. We will see distributed resources become main stream and demand-side management will help integrate those with our traditional and still vital supply-side resources, as well as renewables. 

What do you expect to be the biggest challenge with implementing DR in the next decade?
Information systems are the backbone of the smart grid and DR. The full integration of supply-side and demand-side resources, both at the retail and wholesale levels, will require large investments in information technology at the same time that we face the need for huge investments in traditional infrastructure. The biggest challenge is to maintain a course that uses technology to improve efficiency in the delivery of customer wants and needs for energy which provides comfort, work, education, entertainment, and an improved quality of life. 

What advice or guidance would you give to young professionals who are considering a career in demand response and smart grid?
The electric utility industry has many challenges ahead, including competition from non-utility distributed supplies like solar and other on-site generation. Electric utilities will have to address the need to be more efficient and provide more service choices. Demand response provides rate options and savings to customers that otherwise would not be available. I note the success of a company such as, which is basically demand response type pricing for airlines and hotels. has a market cap of $36 billion, far exceeding the largest electric utility companies today. Solutions to demand-side management will continue to be critical in the foreseeable future. If you like the idea of merging information technology, communications, and large capital infrastructure, this is an area that will continue to provide great opportunities. 

To become a member of ADS, please visit our website.

April 2012


American Electric Power
Arizona Public Service


ISO New England
National Grid
Navigant Energy Practice
Pacific Gas & Electric
PJM Interconnection
Progress Energy
Salt River Project

San Diego Gas & Electric
Southern California Edison
Southern Company
Tennessee Valley Authority





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Periodic updates on news & events related to demand response and smart grid.