There are a lot of opinions floating around about what compels residential customers to cut energy. The answer, if you ask Oklahoma Gas & Electric and Silver Spring Networks, is a smart thermostat and variable pricing. An in-home display doesn’t hurt either.

OG&E and Silver Spring recently released interim results of their two-year pilot involving 2,500 homes during the summer of 2010. Participants with a smart thermostat saw up to a 57 percent reduction in energy during the peak period when compared to a control group. Average energy use plummeted up to 33 percent during those highest price periods.

In addition to smart thermostats, customers were given Silver Spring’s web portal, CustomerIQ, and home energy displays. Those participants were split into two groups. One group saw costs shift between peak ($0.23 per kWh) and off-peak ($0.042 per kWh) pricing tiers. The other group was on variable peak pricing, which was set the day before, and could range hourly from $0.045 to $0.23 and $0.46 per kWh for critical peak.

The preliminary results are impressive, given that other utilities with fully rolled out TOU pricing programs have not seen such gains. Toronto Hydro has a spread of about 4 cents to 9 cents per kWh, and the utility said it will be revamping its TOU pricing; customers are not responding because the pricing signal is too weak. A PowerCents DC pilot led by eMeter had more promising results by charging $0.75 for critical peak pricing compared to about $0.11 the rest of the time, which led to an average of 34 percent savings that summer for the participants in that group.  

“One thing that OG&E and a few of our other clients are getting right is how holistically they’re thinking of this,” said Eric Dresselhuys, chief marketing officer of Silver Spring Networks. It’s not just about bill-stuffers or in-home displays or automation. It’s all of the above.

The right price points don’t hurt either. OG&E seems to have found costs that make people sit up and listen. During an earlier trial involving 6,000 apartments in Oklahoma City, many consumers seemed empowered by the information. "I used to wash clothes and dishes during peak hours. I don't do that anymore," said one participant.  "The best thing is knowing you are saving and being able to calculate or see the amount you are using in a 24-hour period -- being able to explain to the children why they were are not able to use the TV in every room," said another.

“In addition to saving on their bills, participants tell us that they generally like being more aware of their energy use and costs,” Ken Grant, managing director of OG&E’s smart grid program, said about the most recent trial. Grant noted in a statement that people respond differently: some might put notes on the fridge, while others just use presets on their smart thermostats. “Our challenge is to provide products and services to help each of these customers make informed energy choices.” Dresselhuys added that one of the best aspects of the OG&E program was that pricing was a reflection of the actual cost of electricity.

For the second half of the pilot, OG&E will double the size of the trial with a mix of small businesses and homes. The upcoming trial participants will also receive displays from Control4, which recently announced a partnership with Silver Spring. The results will shape customers' offerings for 2012. Although the second phase of the pilot is ongoing, all 775,000 of OG&E’s customers will have access to the CustomerIQ web portal as they receive smart meters The end result is not just curbing a little peak demand, but also delaying the addition of any new fossil-fuel generation until at least 2020.

Tags: control4, og&e, oklahoma gas & electric, silver spring networks