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TOU for Tenants: Pay for What and When you Use Electricity Joseph S. Lopes Senior Vice President

TOU for Tenants: Pay for What and When you Use Electricity Joseph S. Lopes Senior Vice President Applied Energy Group, Inc. Hauppauge, NY www.appliedenergygroup.com. Background.

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TOU for Tenants: Pay for What and When you Use Electricity Joseph S. Lopes Senior Vice President

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  1. TOU for Tenants: Pay for What and When you Use Electricity Joseph S. Lopes Senior Vice President Applied Energy Group, Inc. Hauppauge, NY www.appliedenergygroup.com TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  2. Background • About 400,000 of the 3 million apartments in NYC and Westchester County (northern suburb) are unmetered in master-metered multifamily residential buildings: • One utility “master” meter for all apartments (typical building/complex has 100 - 400 apartments, some up to 3,000) • Utility reads master meter and bills building, who collects electric charges from tenants • Apartments are unmetered so electric use collections based on apartment size – not use! • Electric charges included in building common area charges and billed as rent or maintenance charges • Con Edison offers a bulk rate for master-metered residential buildings that is 30% less than retail rate – disincentive to convert to utility metering for apartments TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  3. Background • Problem: with Master-metering: No price signal for tenants so tenants waste electricity (NYSERDA: 18-26%) • Solution: Programs by New York State (NYSERDA, PSC, ISO) to respond to electric deregulation • Designed to develop metering, billing technologies and residential experience • Advanced Metering (CEM) Incentives, including submetering • Demand Response programs to provide incentive to reduce/shift from peak • Incentives and pilot projects to fund advanced energy control technology • Time-sensitive or Real-Time Pricing Pilot Programs • Evaluate response with metering analysis and participant feedback TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  4. Submetering • Stage 1: Submetering • Option for building to collect from tenants in proportion to their use, rather than apartment size • Rent or maintenance bill to tenants must first be reduced to account for embedded electric charges • Coops more likely to do this since rent regulation and PSC rules make submetering in rentals much more difficult • Submeters must often be installed in apartments (only place to measure usage) • New technology means small submeters that can be read remotely by powerline carrier or wireless data communications • Cost of submetering, monthly meter reading and billing typically more than offset by savings TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  5. Submetering – Price Signal Under Submetering, pay for What you use (Fair!) • Usage varies much more than one might expect – even the same apartment size Studios: vary from 1500 – 15000 kWh/yr 1 BR: 3000 – 25,000 kWh/yr 2 BR: 4,600 – 30,000 kWh/yr 3 BR: 3,700 – 32,000 kWh/yr TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  6. Submetering – Price Signal • Many perceive their electricity as “free” • Submetering price signal is incentive for reducing waste and more efficient energy usage • Tenants respond by using less and investing in efficient appliances over time – savings persist! Within the same building, submetered apts. Used 39% less than non-submetered apts. (renters) TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  7. Time-of-Use (TOU) – Price Signal • Submetering • Under typical Submetering plan, master-meter bill costs typically allocated based on resident monthly kWh at a flat rate (cents/kWh) • Building master-metered bill typically has a more complex rate – peak period (demand) charges for delivery (20-30% of bill) • When you use energy MATTERS! Stage 2: Time-of-Use (TOU) pricing - Pay for When you use energy! • Most advanced submetering systems are capable of interval data collection, so TOU reading/billing is feasible at little/no additional cost TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  8. Better Price Signals for Submetering • Two residents using the same monthly kWh may contribute differently to costs TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  9. Time-of-Use (TOU) – Price Signal • Stage 2: Time-of-Use (TOU) pricing - Pay for When you use energy! • Reduce building electric costs and utility costs if you shift/reduce demand • Provide incentives for residents to shift away from utility and building peak • Residents need Information and incentive to help them respond: energy and TOU tips • The right rate structure is needed! TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  10. TOU Pilot Program Components • New Rate Design has same total cost but prices vary by time period matching: • Utility System Peak Period (2-6pm) - Weekdays • Customer/building peak (6-10pm) – Critical Day • Technical assistance at no cost • Workshops, Information, analysis • web site www.apartmentenergytips.com • Subsidized billing costs • Provide passive signals and alerts during critical peak periods TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  11. TOU Program Rate Structure • Rate Structure Design • 3 time periods: Peak, Shoulder, Off-Peak • Current rate averaged app. 15 ¢/kWh last summer • Peak (2-6 pm weekdays, 2-10 pm critical days) about 30¢/kWh • Shoulder Period (10-2, 6-10 weekdays except only 10-2 on critical days) about 20¢/kWh • Off-peak about 10¢/kWh • Average resident would pay the same if they did not change their pattern of use • Most Residents will pay a little less, some may pay a bit more if they have a very peak-oriented usage pattern TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  12. TOU Program Rates TRAFFIC LIGHT GUIDE TO TOU RED: Stop; YELLOW: Caution; GREEN: Go! Weekdays ----------------------------- Peak Hours: 2-6 pm (red) Shoulder 10am-2pm, 6-10pm (yellow) Off-Peak 10pm-10am (green) --------- Weekends/Holidays No Peak hours Shoulder 6-10pm (yellow) Off-Peak 10pm-6pm (green) TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  13. TOU Program Rates TRAFFIC LIGHT GUIDE TO TOU RED: Stop; YELLOW: Caution; GREEN: Go! Critical Day (up to 5 “peak” days per month) ------------ Peak Hours: 2-10 pm (red) (extended from 2-6 pm) ~ 30 c/kWh Shoulder 10am-2pm, (yellow): ~ 20 c/kwh Off-Peak 10pm-10am (green) ~ 10 c/kwh TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  14. TYPICAL WEEKDAY ENERGY PROFILE • Brooklyn, NY Coop Case Study: 1225 Apts, with 825 shareholders (owners), 400 renters (not billed on submeter) • Weekday and peak/critical day typical apartment hourly profiles, compared to TOU rate periods and price levels TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  15. TYPICAL WEEKEND DAY ENERGY PROFILE • Weekend day typical apartment hourly profiles, compared to TOU rate periods and price levels TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  16. TOU Pilot Case Study Results • During July shadow billing, 55% of TOU participants (below) would have saved (avg $2 = 3%) vs. only 46% of non-parts. | | | | | | TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  17. TOU Pilot Case Study Results • During Fall Month (below) shadow billing, 65% of TOU participants would have saved (avg $3, 6%) vs. 51% of non-parts. | | | | | | TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  18. TOU Pilot Case Study Results • Annually, about 57% of participants would have saved on TOU rate vs. flat rate last year, based on shadow billing: More save in Spring/Fall, less in Summer. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  19. TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants vs. Building (193) with Low Percentage (57%) of Participants • Average Weekday: Bldg with more participants has lower overall use and lower kW peak Average Weekday load profile dips for high participant building at 2pm start of peak period |Peak Period->| TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  20. TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants vs. Building (193) with Low Percentage (57%) of Participants • Peak Day (91 degrees): Bldg with more participants has lower overall use and much lower kW demands during peak and evening Reduction in usage more significant on Peak Day than Average  Weekday Peak Day load profile dips for high participant building at 2pm start of peak period |Peak Period->| TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  21. TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants – Weather sensitivity of Daily kWh = 44.3 kWh/CDD65 TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  22. TOU Pilot Case Study Results Building (193) with Low Percentage (57%) of Participants – Weather sensitivity of Daily kWh = 51.2 kWh/CDD65 16% more weather sensitive than high-percentage participant building Base load nearly the same as High-Participant Building (1130 kWh vs. 1142 kWh) TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  23. TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants – Weather sensitivity of Coin Peak (2-6pm) kW = 1.82 kW/CDD65 TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  24. TOU Pilot Case Study Results Building (193) with Low Percentage (57%) of Participants – Weather sensitivity of Coin Peak (2-6pm) kW = 2.19 kW/CDD65 20% more weather sensitive than high-percentage participant building Base demand the same as High-Participant Building (44 kW) TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  25. CONCLUSIONS • Submetering provides an essential price signal to apartment residents – worth 20% or more in energy savings • Time-of-Use (TOU) Pricing adds a valuable additional price signal that can affect both energy and demand • Simple Pricing plan with high peak to off-peak ratio (3:1) and well-defined periods can be understood and responded to by residential customers • Apartment-dwellers, with fewer end uses and options, can respond to price signals and TOU rates • Critical Peak Pricing element provides additional help for multifamily buildings with demand charges TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  26. CONCLUSIONS • Submetered tenants (Pilot Program participants) have similar base loads but are much less weather sensitivity than non-submetered/non-participants • Difference in weather sensitivity estimated as 30% for kWh and 40% for coincident peak kW demand • Concepts of submetering and TOU pricing should also be applicable to Commercial master-metered units • Advanced Metering for residential multifamily apartments is a cost-effective option that provides demand response and energy conservation • Submetering and TOU rates, especially with Critical Peak Pricing, encourages conservation, efficiency and investment in more efficient appliances, lighting and timers TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  27. NOTES TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

  28. Notes TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005

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