Demand Response Operations
As our clients move into program implementation, we assist them with the creation of both technical and business architectures that enable the utility to operate Demand Response programs. The initial business function that needs to be built is Demand Response Operations, as this team ensures that Demand Response programs are executed appropriately. There are multiple facets involved in the execution of the Demand Response programs, from managing customer acquisition, determining the system threshold to assemble a meeting to call an event (this meeting is commonly called the “tailboard”), customer event notification, event management, post-event analytics, and customer settlement.
• Customer Acquisition Strategy including Marketing and Outreach – The customer acquisition strategy strongly depends on the goals of the program and the program design. Assuming that the utility wants to have a reliable and flexible Demand Response program that can respond quickly, an automated program with strong penalties may be required. In this case, a dedicated account representative would be required if the program was targeted at large commercial and industrial customers, while mailers and mass market campaigns would be needed for residential customers. We would perform trial campaigns to determine the marketing and outreach strategy and materials that would garner the highest value customers for the utility’s Demand Response program, based on our previous experience in recruiting customers for Demand Response programs.
• Customer Event Notification – As with the customer acquisition strategy, the Customer Event Notification methods are dependent on the program design and any enabling technologies that are provided to the customers. For relatively simple programs that are for Day-Ahead/static duration events, multiple channels exist to notify customers, including; fax, email, website updates, phone, direct control of automated devices, and Home Area Networks (“HAN”). When the utility attempts to address more sophisticated operational needs, the allowable response times become shorter and the type of channels feasible to effectuate customer notification reduces, until only automated control of the devices is sufficient to be able to achieve the goals of the utility.
Customer Event Notification is normally an automated process that notifies the participating customer that a Demand Response Event is going to occur. Demand Response programs are, usually, Day-Ahead programs, or Day-Of programs. As defined in the program tariff, the customers who have been selected to participate in the coming program, must be notified a predetermined number of hours prior to the event starting. For example, if a Day-Ahead program event is called that will start at 2:00 PM on Wednesday, the tariff would stipulate that the participating customers must be notified by 4:00 PM on Tuesday. A number of studies have been created that show effective Customer Event Notification contributes to a utility meeting its Demand Management goals.
• Event Analytics – After a Demand Response program event has completed, it is critical to evaluate the effectiveness of the Demand Response resources; i.e. customer response over the duration of the program event met its goals. The Event Analytics process involves the creation of appropriate “baselines”, which are estimates, or forecasts, to provide a reasonable measure of the customer’s non-Demand Response behavior. The retrieval of data from meters depends on the meter architecture deployed and available. In the best case, real-time data can be used to communicate with customers, and enable the customer to adjust their ‘Event Day’ action plans to match the forecasted load reductions.
• Settlement – After a Demand Response event has completed, customers are compensated according to the terms stipulated by the tariff. These settlements can come in the form of a credit on the bill to a bilateral contract between the utility and the customers, as well as direct checks for customer participation. Depending on the structure of the tariff, it is possible that individual customers may underperform in significant ways, resulting in the need to have reasonable penalties for non-performance, while balancing the concerns that customers are not generators, and that Demand Response programs (sometimes referred to a ‘Virtual Generators’) are not generally able to perform in the same way as a conventional generating unit.
Organizational Change Management
Organizational Change Management (“OCM”) is an integral part of the deployment of the technology infrastructure being implemented to support the Demand Response Strategy. OCM consists of four main activities:
• Stakeholder Impact Analysis
• Stakeholder Communications
• Training
• Business Process Creation and Maintenance
The stakeholder impact analysis identifies the internal people who are going to be impacted by the deployment of the Demand Response Strategy and resulting initiatives. Stakeholders are assessed as being in at least one of the following categories:
• Responsible – owns the initiative
• Accountable – must approve the initiative as part of the Governance process
• Supportive – provides resources or a supporting role during implementation
• Consulted – provides information and/or capability necessary to complete the work
• Informed – must be notified of the results
Once the stakeholders have been identified and their roles defined, a communications plan must be created and executed. The communications process ensures that all impacted stakeholders know what is happening, and that they understand the implications for their business area. With the introduction of new technology solutions and business processes, the resources impacted by these changes require training how to use these new tools. Business processes support the successful operation of any technology environment, ensuring the systems support the business functions required as part of an end-to-end process. As new technologies are introduced, existing business processes can require revision or new business processes may need to be created.
Empowering Customer Consumption Decisions
A key goal of any Demand Response Strategy is to ensure customers actually reduce or move consumption when required to do so. An important element of achieving this goal is the provision of the appropriate information for customers to make smarter energy consumption decisions. Today, the fundamental dynamics of the electrical grid are evolving as technological developments, growth of new marketplaces, and expanding access to information, change how energy is generated, produced, transmitted, transported, distributed, and consumed. For customers, these changes are manifesting themselves in the form of a new category of service offerings that helps customers understand their energy consumption patterns and empower them to modify their behavior to use energy in a more efficient and environmentally sustainable manner. A key enabler of this new category of energy services is the ability utilities have to collect key customer data in a timely manner and making this data available in a standardized format. This data can be provided to customers through a number of different channels, including; Customer Data Access, and Home Area Networks.
Access to customer meter data through a standardized framework is a critical component in increasing customer satisfaction and engagement. Energy utilities have a critical responsibility to ensure that customer energy usage data is made available in a secure way, protecting the privacy and safety of its customers, while providing a platform for customers to make more informed energy consumption decisions.
We can provide the technical and business architecture to support these Customer Empowerment initiatives, in much the same manner as we provide for Demand Response operations enablement. Much of the technical and business architecture that needs to be created for a well-functioning Demand Response Operations group can be leveraged by Customer Empowerment initiatives, such as customer data access, and Customer Empowerment initiatives can also have positive feedback effects on the core Demand Response operations processes, such as providing more reliable Demand Response via Home Area Network enabled devices.