New Study: Lessons Learned in Dynamic Pricing

Smart Grid News
June 21, 2020

The Association for Demand Response and Smart Grid (ADS) has released a new case study that explores the impact on acceptance and adoption when utility customers are given choices in pricing options such as time-differentiated pricing and others.

The study, based on Salt River Project's pricing experience, was chosen as the subject of the case study because of its successful track record with pricing programs, said Dan Delurey, ADS executive. The National Action Plan on Demand Response was published by FERC two years ago to encourage case studies that would yield lessons learned.

The study was released in advance of the National Town Meeting on Demand Response and Smart Grid. Participants in the study were employees of the Phoenix-based municipal utility, Salt River Project and Arizona Community Action, a local consumer advocacy group.

Here are some of the lessons learned from Salt River Project:
  • Make programs voluntary, and make them easy. Also, let customers out of a program if they change their minds.
  • Offer pricing programs that encourage people to develop new energy use habits that fit in with their daily schedules, and that can be communicated visually.
  • Offer prepay to everyone, not just people with credit problems. The reasoning is that students, seasonal residents and people who are paid weekly experience definite cash flow benefits. And don't apply service charges per payment, ever.
  • Help people choose the program that's right for them. Ask simple questions to get a feel for their living situations and concerns. Interactive tools, secure account-specific rate comparisons, and customer service support will help customers choose the best rate. It also will help utilities ensure broad adoption and continued participation in their programs.
The study also notes that smart meters will "allow the utility to build on an existing platform of trust and consumer satisfaction, introduce new pricing programs that can appeal to more customers, and allow consumers to potentially achieve greater cost savings."

View the article here.

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