Baltimore Gas & Electric Company (BGE) operates a smart grid services that offers a ‘PeakRewards Program’. Over 270,000 residential customers have enrolled in this program. The energy saving generated by these users  have according to BGE produced the equivalent capacity of building a large new power plant at a fraction of the cost. 

Key customer benefits on offer:

• Customers allow “smart cycling” of their air conditioning in exchange for annual bill credits
• Choice of “smart” thermostat or outdoor switch
• Choice of 3 levels of cycling – 50%, 75%, or 100% -- and up to 2 over-rides per summer
• Ability to remotely adjust temperature settings

Cost Comparison: PeakRewards: $165 per kW,  New Generation Plant: $1,000+ per kW 

Apart from these savings customers have also shown great interest in the company’s ‘Energy Efficiency & Conservation Initiatives’. 

Its  portfolio of initiatives to lower energy bills and increase efficiency includes:

• Efficient lighting and appliances
• Heating and cooling
• Home energy audits and retrofits
• New construction
• Targeted low income programs
• Custom solutions for large commercial accounts
• Significant opportunities to reduce energy waste

Cost Comparison - Cost to Reduce Consumption:  2-3 cents per kwh, Cost to Supply More Power: 10-12 cents per kwh 

In 2008-2009 the company conducted a  Smart Energy Pricing (SEP) Pilot where it measured customer response to price Signals. 

Details of the pilot include:

• 1,000 customers randomly selected
• Day ahead notification of a peak event
• Rebates offered for energy reductions during peak periods (2pm to 7pm)
• Test groups included:
  –      Price incentive only
  –      Price incentive with in-home display (Orb)
  –      Price incentive with Smart Thermostat and Orb
• Advanced meters installed to record customers’ usage on an hourly basis to calculate bill rebates 

The SEP Pilot demonstrated significant consumer interest and willingness to adjust consumption. Amongst other things it was found that:

• Customers respond emphatically to pricing signals, reducing consumption by approximately one-quarter to one-third
• Average customer savings was $115
• More than 98% reduced their bills
• Over 93% of customers were satisfied with Smart Energy Pricing;
• 97% wished to continue participation  

The conclusion was that smart grid offers significant customer benefits in several key areas:

• Lower Energy Bills
• Reliability
• Enhance services
• Environment
• Resource conservations 

Those benefits are highlighted below in each of those sections. 

Lower Energy Bills

• Rebates paid for reducing usage during peak periods -- funded via PJM capacity and energy revenues
• Significant opportunities for conserving energy and reducing bills throughout the year by empowered consumers
• Downward pressure on capacity and energy prices due to lower demand
• Reduced transmission and distribution capital expenditures
• Operational savings in meter reading and other functions 

Reliability

• Peak demand reductions projected to exceed 500 MW
• Offsets the need to build expensive new generation units
• Improved performance in BGE PeakRewards^SM program via two-way communications network and verification of premise level and system load reductions

Enhanced Service

• Automated metering virtually eliminates estimated bills
• No longer need to visit customers homes to manually read meters
• Ability to produce on-demand meter reads for starting / stopping service
• Automated outage notification and energized meter verification, leading to faster response and restoration times
• Customers receive enhanced information about their energy usage and cost 

Environmental

• Reduced carbon and other emissions
• Reduced need for new power plants
• An infrastructure which can support growing demand for renewable energy resources
• Supports the emergence of electric vehicles and PHEV’s, allowing for off-peak charging at reduced rates and minimizing the impact on peak demand growth 

Resource Conservation

• Total peak demand reduction of over 1,750 MW from all programs
• Potential to improve efficiency of energy delivery and reduce line losses through voltage and power factor optimization
• A realistic opportunity to achieve the EmPOWER Maryland goals 

Where to go from here?

The company has  filed its Smart Grid application with the Maryland Public Service Commission in July 2009 -- a PSC decision is expected by April 2010.  If approved, Smart Grid deployment will begin in 2010 and continue through 2013/14 

They were also awarded a $200 million Smart Grid grant from DOE, funded through the federal stimulus program.

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