Demystifying Utility and Grid Programs

When Elexity takes on a customer energy engagement, we start by getting a clear view of our customer’s total energy situation. What’s their monthly utility bill? How much is gas, how much electric? Do they own their own facility, or if not, what does their lease allow them to do? What are their operating hours? What kind of HVAC system do they have? How is it currently controlled? Do they have solar? EV chargers? A battery? And lots more.

After data collection, we know enough to determine the best set of options to present without overwhelming the customer. Our goal is to provide improved comfort and convenience while delivering significant utility cost reductions. Sometimes, that means dealing with the utility on the customer’s behalf.

Our customers have a wide range of opinions and levels of engagement with their utilities.  Some have significant resentment for their utility’s rates and poor customer service; others have a much more constructive relationship through their account manager or utility program staff. Either way, Elexity views the importance of utilities and other grid operators as a fact of life, and can help navigate the bewildering variety of energy programs available to our customers.  

While energy efficiency and demand response programs have been around for decades, newer virtual power plant (VPP) and load flexibility options are also now available in most markets. Most customers have never participated (nor bothered to understand) any of these options, and that’s fine – they have more important decisions to make. It’s Elexity’s job to get the energy picture right.

One version of a utility rate meant to incentivize load flexibility is hourly pricing, a form of time-of-use (TOU) pricing. TOU pricing has been common for commercial customers at many utilities for many years, and hourly pricing is a natural extension of TOU rates. We’ve worked on pilot projects in California demonstrating that hourly pricing, combined with smart controls, can save customers money – sometimes a lot of money.

Because prices can vary significantly from hour to hour, the graph below presents actual SCE price data from a day earlier this month:

Since 2023, the Southern California Edison (SCE) Dynamic Rate Pilot has provided a great no-risk opportunity for their commercial customers. “No Risk” is a rare find in utility programs, so we helped a dozen of our customers enroll. Here’s how the no-risk structure worked:

• The customers continued to pay their usual SCE bill, but received signals every afternoon that showed what their hourly prices “would be” for the next day.
• We controlled their usage as though they were actually paying those hourly prices.
• At the end of the pilot, if customers saved money on the hourly rates, SCE cut them a check for the savings.  
• If the hourly rates cost them more than their usual SCE bill, the customer owed nothing.  

We helped all of our customers control their costs, as we promise every customer – but some who had significant controllable usage when the value of shifting was highest benefited disproportionately.  SCE and Elexity presented one auto dealer with a check for more than $20,000 at the end of the one-year pilot, demonstrating a project payback time of less than three months.

Hourly pricing is not for everyone, but over years of experience with these programs, Elexity has found customer usage patterns for which significant savings are possible.  From Georgia to California, such pricing programs are growing quickly; with good automation and the right partner, load flexibility programs can deliver significant returns. In future articles, we’ll discuss other types of energy efficiency, demand response, and VPP incentives that can improve the economics of investments in solar and batteries.