Demand response is inherently tied to energy use, but often it has nothing to do with the actual utility bill.
Constellation is looking to change that dynamic with its latest offering, Constellation Rate Response, which will allow commercial and industrial customers to get a reduced rate on their electric bill or a direct bill credit when they enroll in demand response programs to curtail energy use when the grid needs it most.
“Very often the dollars for demand response are going to a different part of the organization than the power budget,” said Gary Fromer, SVP of energy management programs for Constellation. “This merges it into one relationship, one contract." For customers, that can mean seeing money for demand response months before they would have with more traditional programs.
Constellation is in a unique position to offer the product. The competitive energy provider, which is part of Exelon, has a robust demand response offering after acquiring CPower in 2010. As both the utility and the demand response provider, it can tie demand management to bill reductions. Constellation took more than two years to tweak the back-end systems to be able to roll out the offering.
The program is meant to appeal to the thousands of Constellation C&I customers who currently aren’t enrolled in demand response, as well as the demand response customers that don’t use Constellation as their power supplier.
Merging demand response and energy efficiency is a growing trend, as companies leverage demand response payments for retrofits. At Constellation, Rate Response is one of a handful of products on its VirtuWatt platform that integrates energy management with energy purchasing. Efficiency Made Easy, for instance, allows customers to build an efficiency project into the power contract. On-bill financing, for both residential and commercial projects, has gained popularity in the past year as a way for utilities to increase interest in energy efficiency retrofits, where the capital expense of a project can instead be an operating expense.
For competitive power companies like Constellation, the shift is an important move to become the trusted energy manager, rather than the utility that only delivers kilowatts and sends a bill at the end of the month. For Constellation, that means building out offerings on its VirtuWatt platform.
“The combining of the energy procurement and the energy manager is the biggest benefit of [Rate Response],” said Ben Chadwick, VP of technology ventures at Constellation. “But the early revenue recognition helps too.”
The program is currently available to Constellation C&I customers in PJM, New England, New York, ERCOT and California.