1. Introducing Smart Energy Pricing Cheryl Hindes
Director of Load Analysis and Settlement
August 12, 2009

2. BGE’s 2008 Smart Energy Pricing (SEP) Pilot featured Peak Time Rebate and Critical Peak Pricing
Pilot of 1,375 residential customers in Summer 2008: 1,021 participants, 354 control group
Pilot included Dynamic Peak Pricing (DPP or CPP) and Peak Time Rebate (PTR)
Customers were given day ahead notification of critical peak event by their choice of methods
, telephone call, text message (up to 5 of each)
Certain had the Ambient Energy Orb, signaling prices by color code and pulsing light
Sample of customers had ‘enabling technology’ (ET = smart A/C switch)
Very favorable customer satisfaction results confirm customers’ interest
Key findings of impact assessment conducted by The Brattle Group:
Price elasticities for DPP and PTR were not statistically different
On average customers saved
22 – 37% at peak conditions* (*PJM definition: hour ending 17:00 with WTHI of 83.1)
18 – 33% during 50 critical hours

3. Dynamic Peak Pricing: Weekdays (excluding Holidays)
$1.30
Pilot Pricing
All – in Rate*
Critical $
Peak $
Off-Peak $
* Includes generation, transmission and delivery
$0.14
$0.09

4. Peak Time Rebate: Weekdays (excluding Holidays)
A Mirror Image of the DPP Rate
Schedule R summer rates are $0.14 / kWh for all summer hours
Up to 12 critical peak days will be called by 6 p.m. the prior day
Customers who use less during the critical period (2 – 7 p.m.) on any critical peak day will receive a rebate. Two levels being tested:
$1.75/kWh
$1.16/kWh

5. Smart Energy Pricing Pilot Design
BGE’s SEP Pilot: 1,300 accounts, a statistically significant sample

6. Despite Unseasonably Mild Weather, BGE called 12 Smart Energy Pricing Events in 2008
Sun 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
June 2008
Sun 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
July 2008
High Temp 96 90 92 92 92 89 91
Sun 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 31 25 26 27 28 29 30
August 2008
Sun 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
September 2008 92 92 92 73 72 6

7. Summer 2008 Pilot Smart Energy Pricing - Peak Demand Reductions *
DPP Tariff No
Tech
Orb &
Switch No
Tech
Orb
Only
Orb &
Switch No
Tech
Orb
Only
Orb &
Switch
Orb & Switch
No Tech
Orb
Only
Orb & Switch
Low Rebate $1.16 / kWh
High Rebate $1.75 / kWh
*Peak demand reductions are defined for HE 17:00 for THI of 83.1 degrees

8. Summer 2008 Pilot Summary of The Brattle Group Analysis

9. Pilot Participants Response was Very Favorable
A post-pilot “experience” survey was conducted during November with the population of just over 1,000 Smart Energy Pricing (SEP) Pilot participants.
Participants were asked about their overall experience with the SEP pilot program, which ran from June 1 to Sept. 30, 2008
Both on-line and mail survey methods were used to gather data.
A total of 785 surveys were completed, including 279 on-line and 506 by mail, producing a response rate of 78%.

10. Customers Were Satisfied with Smart Energy Pricing!
On a scale of 1 to 5, where 1 is "Very Dissatisfied" and 5 is "Very Satisfied", please rate your overall satisfaction with the pilot program. (77% response rate)
93% Were Satisfied
Over 60% Were Very Satisfied

11. PTR More Favorable than DPP, Overall 93% Satisfied
On a scale of 1 to 5, where 1 is "Very Dissatisfied" and 5 is "Very Satisfied", please rate your overall satisfaction with the pilot program. (77% response rate)
2/3 of PTR Customers Were Very Satisfied
About Half of DPP Customers Were Very Satisfied

12. think smart energy pricing should be standard for all BGE customers
Customers Think Smart Energy Pricing Should be the Standard
During your pilot participation, you experienced a variable rate program where energy used during critical peak periods cost more than energy use during other times. Customers saved money by using energy during non-critical peak periods. Do you think this pricing format should be standard for all BGE customers? (Select one option)
4/5 of PTR participants
think smart energy pricing should be standard for all BGE customers
97% would like to return to the same pricing structure in 2009

13. Welcome Packages were Found to be Useful
Q11. Did you find the welcome package that you received useful? (Select one option)

14. Saving Money Motivates Participants
Q1. What was the most important reason for your participation in the program? (Select one option)

15. Bill Savings Exceeded Expectations
Q19. Did you EXPECT to achieve bill savings when you enrolled in the program?
Q20. Over the duration of the program, did you ACHIEVE bill savings as a result of your participation in the program? (Sele

16. Proposed TOU Rates Are Revenue Neutral
Control Group Bill Impacts Summer Generation Impact = Proposed TOU Rate – Current Rate*
Most customers save a modest amount under the proposed TOU rates
On Peak: $ / kWh
(Summer Non-holiday Weekdays 2-7 pm)
Off Peak: $ / kWh
(All other times)
Average savings: $2 or 0.4%
Largest increase: $32 or 3.7%
Largest decrease: $58 or 5.2%
* Summer Generation rates are compared
Proposed TOU Rates Are Revenue Neutral

17. Peak Time Rebate Customers See Modest Saving Even without Rebates
Most customs see modest savings under the proposed TOU rates
On Peak: $ / kWh
(Summer Non-holiday
Weekdays 2-7 pm)
Off Peak: $ / kWh
(All other times)
Average savings: $5 or 0.8%
Largest increase: $32 or 4.3%
Largest decrease: $54 or 6.1%
Proposed TOU Rates Are Revenue Neutral

18. With Earned Rebates Added All PTR Customers are Winners
Once rebates have been added, all Peak Time Rebate customers would save money under the proposed TOU rates.
On Peak: $ / kWh
(Summer Non-holiday Weekdays 2-7 pm)
Off Peak: $ / kWh
(All other times)
Average summer savings: $131
Decreases range from
$1.44 to $681
PTR Customers All Save Under TOU with Rebates

19. Some Customers Reported Incomes and Household Sizes That Qualify for MEAP
Some Customers Chose
Not to Report Income (7.6%)
Average summer savings: $2
Largest increase: $32
Largest decrease: $31
TOU Rates: Revenue Neutral for MEAP Eligible -- without Rebates

20. When Earned Rebates Are Added All MEAP Eligible Households Save
Summer savings range from
$10 to $263
and average $98
TOU Rates: Revenue Neutral for MEAP Eligible -- without Rebates

21. Certain Households Include Senior Citizens Who are Age 65 or Older
Households with seniors tend to see modest savings under proposed TOU rates even before rebates are applied
Average summer savings: $2
Largest increase: $32
Largest decrease: $38
TOU: Revenue Neutral for Senior Households-- without Rebates

22. When Rebates Are Applied All Households with Seniors Save
Summer savings range from
$1.44 to $681
and average $119
TOU Rates: Revenue Neutral for MEAP Eligible -- without Rebates

23. In Certain Households All Residents Are Senior Citizens Age 65 or Older
Households composed entirely of seniors tend to see modest savings under proposed TOU rates even before rebates are applied
Average summer savings: $1
Largest increase: $32
Largest decrease: $38
TOU: Revenue Neutral for Senior Only Households without Rebates

24. When Rebates Are Applied All Senior-Only Households Save
Summer savings
average $98
And range from
$1.44 to $310
TOU Rates + Rebates = SAVINGS

25. Certain Low Income Households include Seniors
There were 16 households with seniors who reported incomes that make them eligible for MEAP.
Prior to rebates, 10 would save money and 6 would not.
$ (14.56)
$ (7.23)
$ (5.29)
$ (2.92)
$ (2.69)
$ (2.18)
$ (1.68)
$ (1.21)
$ (0.79)
$ (0.20) $ $ $ $ $ $
TOU: Revenue Neutral for Senior Only Households without Rebates

26. When Rebates Are Applied All MEAP Eligible Households with Seniors Save
$ (262.54)
$ (254.98)
$ (157.13)
$ (123.44)
$ (85.52)
$ (83.93)
$ (78.36)
$ (70.31)
$ (63.79)
$ (59.79)
$ (43.95)
$ (39.71)
$ (33.69)
$ (19.95)
$ (13.42)
$ (10.30)
Summer savings average $88
and range from
$10 to $263
Proposed TOU Rates + Rebates = SAVINGS

27. Peak Time Rebate was Widely Favored
BGE Proposes to Offer Peak Time Rebate to all Residential Customers under AMI
BGE held 6 focus groups in 2007 focused on CPP
Our customers said they need help in understanding their usage and how they could save
Our customers said CPP could not be a mandatory rate
More SEP participants were very satisfied with PTR (66%) than with CPP (48%)
Office of People’s Counsel and others questioned the appropriateness of CPP as default and favored PTR instead
Most (81%) PTR participants think PTR should be standard (default) pricing
Peak Time Rebate was Widely Favored

28. FERC Chairman Supports DR
“…The potential for demand response and energy efficiency to reduce or reshape our nation’s need for energy is enormous.
…Our Assessment finds peak electricity demand reductions across the country are already 38 gigawatts. But the potential for demand reductions goes as high as 188 gigawatts, or 20 percent of our peak load, with no demand response. In other words, the nation could see almost five times as much demand response as it has today and reduce our peak load and the need for expensive carbon and heat emitting peaking plants significantly. Let me emphasize that this number is not a recommendation or prediction by the Commission, but the findings of a staff-led study of what’s achievable. “
From FERC Chairman Wellinghoff's statement ,NARUC summer meetings presentation on “A Shared Energy Vision for North America: Regulations, Markets, and the Environment”

29. Questions?