Business Impact Summary
Baltimore Gas and Electric (BGE) is a bellwether of the viability and potential benefits of demand response (DR) initiatives, having offered a successful direct load-control program for its customers for more than 20 years. By implementing Ventyx Retail Operations integrated with its CIS, BGE recently rolled out a full DR program offering customers even greater flexibility—resulting in decreased costs, reduced capital expenditures and environmental benefits.
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The Company
BGE, headquartered in Baltimore, is Maryland’s largest gas and electric utility, delivering power to more than 1.2 million electric customers and more than 640,000 natural gas customers in Central Maryland. BGE is a subsidiary of Constellation Energy, a FORTUNE 500 company also headquartered in Baltimore, with subsidiaries that generate, sell and provide other energy-related services to customers throughout North America.
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The Challenge
As a utility with a long and successful history of demand-side management programs, Baltimore Gas and Electric (BGE) is a bellwether of the viability and potential benefits of demand response (DR) initiatives. BGE has offered a successful direct load-control program for its customers for more than 20 years. Today, BGE offers a variety of programs, services and incentives to help customers conserve energy, save money and improve the environment through the BGE Smart Energy Savers ProgramSM. BGE's Smart Energy Savers ProgramSM incorporates advanced metering, demand response, dynamic pricing, and efficiency and conservation programs. These initiatives help reduce customer peak demand and contribute to the State of Maryland's goal of reducing energy and demand by 15 percent per capita by 2015.
A key component of the BGE Smart Energy Savers ProgramSM is the PeakRewardsSM Demand Response Infrastructure (DRI) initiative, arguably the most aggressive residential program in the U.S. The DRI initiative ultimately targets a total 600 MW of peak load control with a 50-percent penetration level into the residential customer base with central air conditioning. This equates to the installation of 450,000 units (416,000 customers) for deployment of next-generation DR technology including "smart" thermostats and load control switches to cycle customers' air conditioning units during high demand. When it reaches its enrollment goal, PeakRewardsSM is expected to reduce enough demand for electricity during peak usage times to power 170,000 homes, the equivalent of the generation capacity of a small-to-medium-size power plant.
A pilot conducted in 2007 to confirm the viability of the program enrolled 1,000 customers. And, by all measures the pilot was a success both from an operational and a customer satisfaction standpoint. Study of load impacts showed an approximate 18-percent reduction in energy usage during the peak time hours due to the "smart" features of the new technology. Furthermore, customer satisfaction survey results were encouraging. In fact, 97 percent of pilot participants indicated that they would be likely to participate in a future program.
Linking operational technology with IT to measure results
Following the success of the initial pilot, BGE rolled out a full program offering customers even greater flexibility, such as rate structure options to allow them to control energy usage based on demand and hourly rates. However, to enable these new options, the utility had to upgrade supporting technology used to manage the data created by the operational technology (e.g., smart thermostats, load control switches, etc.) on the grid. This linkage was necessary to communicate the data in a meaningful way to other supporting solutions such as the customer information system (CIS) and to accurately measure the daily active load management (ALM) impacts.
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The Solution
BGE found the solution it was looking for in Retail Operations from Ventyx, an ABB company. Retail Operations is the industry's most comprehensive solution for retail energy markets, providing utility data management, customer contract management, revenue and load forecasting, load profiling and aggregation, and distributed energy resource management in a single system. Designed specifically for use in retail energy markets, Retail Operations is ideal for handling the data modeling and analytical requirements of ALM in deregulated markets.
By integrating Retail Operations with its CIS, BGE is using the solution to manage a number of demand response program activities, including:
- Calculation of hourly DR reductions
- Calculation of hourly DR overrides
- Detailed and summary reporting of DR events by time period
- Seven-day ahead forecasting of DR availability
- Support of substation-feeder specific ALM events enabling quantification of the locational reliability and economic impact benefits
- Calculations in daily "backcasts" and settlement with the PJM market
This integration of Retail Operations to both the operational technology (i.e., monitoring and control systems, including Cooper HVAC switches) and the CIS enable the solution to provide valuable information and forecasts on both a daily and a monthly basis. As a result, BGE can efficiently and accurately provide the information required by PJM to remain in compliance with market regulations.
Each day the CIS communicates to Retail Operations which customers have switched to which retail suppliers. Retail Operations then forecasts and backcasts the energy consumption for each supplier and for the standard offer suppliers. The standard offer load (customers who haven't switched from BGE) is supplied through a series of auctions and requests for proposals. Retail Operations calculates the peak load contribution values for each service location, and this value determines the generation and transmission capacity requirements for the suppliers.
On a monthly basis, Retail Operations profiles and aggregates the non-interval meter data to hourly values and performs reconciliation between the scheduled and metered volumes. This is communicated to PJM for financial settlements with the suppliers. By ensuring accurate settlements, Retail Operations helps BGE remain financially whole in its role as the provider of last resort (POLR). The operation of an efficient POLR market ensures that BGE has a diverse, competitive, and reliable field of third-party suppliers from which to choose.
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The Result
BGE has achieved numerous benefits for both the utility and its customers via the PeakRewardsSM program. And, as the program continues to roll out through 2011, incorporating the new capabilities enabled by Retail Operations, many other benefits are expected, including the following:
- Decreased costs through wholesale price mitigation and capacity revenue. By supporting the accounting of demand response when offered to the market during periods of high system costs, Retail Operations facilitates the valuation of demand reduction that can lead to reduced wholesale prices by backing down demand to avoid higher-cost generation. Retail Operations also provides settlements that allow BGE's participation in the capacity markets (reliability pricing model). Increased electric system reliability with ability to meet future load growth. Retail Operations enables demand response for use in providing reserves and for contributing to capacity margins to reliably meet load.
- Reduced capital expenditures for new distribution infrastructure. Using Retail Operations, BGE can aggregate the load and available demand response at the distribution model and accurately identify where demand response can be used to avoid costly capital expenditures in the distribution system.
- Environmental benefits—By minimizing the generation cycles required to meet demand, Retail Operations enables BGE to reduce its emissions while maintaining customer satisfaction.
Specifically, the DRI initiative is allowing the utility to reduce or defer the need for new transmission and generation capacity—which ultimately will help customers save on power bills. For instance, BGE estimates that $545 million of cumulative savings can be achieved by residential customers between 2008 and 2015 due to PeakRewardsSM expansion rather than new generation.
Empowered by the new Ventyx technology, the program will also help BGE reach its major goal of energy savings. Once fully implemented in 2011-12, PeakRewardsSM should enable 600 MW of demand response capacity, triple the amount available before the launch of the program.
Customer satisfaction is another key benefit. PeakRewardsSM participants have been overwhelmingly satisfied with the program, with higher than 90 percent of survey respondents expressing satisfaction.
Due to these numerous benefits, and broad acceptance by customers, the PeakRewardsSM program should help keep BGE at the forefront of successful demand-side management initiatives for years to come.
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