PG&E Corporate Responsibility and Sustainability Report 2018

Northern California Wildfires

Demand Response

PG&E’s demand response programs enable customers to reduce energy use during periods of peak demand, adding stability to the electric system. By giving customers incentives to curtail usage, demand response programs provide valuable services to the grid, lower costs for customers and help reduce greenhouse gas emissions.

Our Approach

PG&E’s demand response options are supported by SmartMeter™ technology, which helps customers better understand their energy usage and lower their energy costs. Our programs also help avoid the need for additional power plants that would only be called on for short periods throughout the year on days when demand is highest, allowing us to take a more sustainable approach to balancing energy supply and demand.

More than 240,000 residential customers participate in the programs we offer, along with more than 200,000 larger commercial and industrial customers. Programs for homes and businesses include:

Program Description
SmartRate Gives residential customers a discounted rate throughout the summer, with the exception of nine to 15 “SmartDays,” when their rates are higher because demand for electricity is high. In 2017, 124,000 customers participated in SmartRate and provided an average load reduction of nearly 28 megawatts (MW) per event day.
SmartAC Allows PG&E to send a signal to a PG&E-provided device on a customer’s air conditioner, cycling the air conditioner to use less energy. The program is offered May through October. In 2017, its 123,000 participants provided about 68 MW of potential load reduction that was available if needed.
SmartRate + SmartAC Automatically cycles the air conditioning systems of participating customers during SmartDay events by controlling their SmartAC devices, helping customers avoid higher SmartDay prices. Approximately 29,000 customers were enrolled in both SmartRate and SmartAC in 2017.
Peak Day Pricing Provides non-residential customers with discounted rates from May through October. In exchange, prices are higher for energy used during designated peak “Event Days” (9 to 15 per year) and times, to discourage energy usage on those days. In 2017, more than 205,000 customers participated in Peak Day Pricing.
Capacity Bidding Program Works with third-party demand response companies that aggregate customers. These aggregators—and, by extension, the customers in their portfolios—act as virtual power plants and receive payments from PG&E in exchange for reducing load on peak usage days.
Base Interruptible Program Enables participating customers—typically large customers—to receive financial incentives in exchange for their commitment to reduce energy usage during emergencies in response to requests from PG&E, which helps ensure grid reliability.
Automated Demand Response (AutoDR) Provides customers with funding for equipment that—after receiving a signal from PG&E—initiates a series of automatic, customer-defined and pre-authorized demand reduction measures during demand response events.

2017 Milestones

In 2017, we leveraged our programs on numerous occasions to reduce demand and ensure reliable electric service for customers.

As one highlight, we conducted a third round of the Demand Response Auction Mechanism pilot, in which PG&E and the other California investor-owned gas and electric companies used a competitive auction to procure commitments to deliver demand response capacity from third parties. These third parties offer their own demand response programs to customers of all types and manage the customer relationships, including when to ask customers to reduce energy consumption. PG&E procured roughly 80 MW of demand response commitments in this manner for 2018 and 2019.

PG&E also continued to provide online tools, programs and services to help businesses thrive with critical peak pricing, and we launched new pilots to test ways for customers to participate in demand response. For example, customers can see a custom rate comparison and learn more about available pricing options on our website.

Measuring Progress

Through our demand response programs, PG&E and our customers had the ability to provide up to 500 MW of load reduction in 2017—about the capacity of a large conventional power plant.

Looking Ahead

PG&E will continue to empower our customers to better manage their energy use with new data platforms and programs, and we will partner with third parties on demand response to deliver innovative products and services that help ensure the reliability of the energy grid.