Smart Meters Empower Customers Through Dynamic Pricing

Smart meter technology, considered a lynchpin to widespread smart grid success, has taken a major step forward with the conclusion of a Washington, D.C. pilot program. PowerCentsDC, a two-year program, tested how consumers reacted to a variety of time-of-use price signal and rate programs.
 
The program’s results were overwhelmingly positive - more than 90 percent of customers at all income levels saved money and modified their energy usage when empowered to make smart decisions. The program was the first time a power utility used an integrated combination of dynamic pricing, consumer engagement practices and smart appliance control. It also marked the first instance of consumers using hourly prices, critical peak pricing and critical peak rebates.
 
PowerCentsDC’s success underscores the importance of utilities providing effective customer communication and choice of pricing plans. Customers demonstrated they would modify energy use when notified by the utility, as well as when presented with a chart illustrating their usage habits with each monthly bill. These results also echo a recent study from the Institute for Electric Efficiency (IEE) which found low-income customers were empowered by real-time price signals to reduce their electricity costs. 
 
As American moves toward the Smart Grid, utilities will be well served to consider that dynamic pricing works best when customers fully understand the power of choice.

Joel Malina | September 17, 2010