In Rate Case, AEP Ohio Seeks New Demand-Side Management Programs With "Return To A More Traditional Utility Role"
Part Of Serving As "Trusted Energy Advisor"
Includes Behavioral, Incentivized Demand Response Program For Residential Customers
AEP Ohio Proposes To Monetize Programs In PJM Market As Available, Keep 20% Of Revenues
June 16, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
As part of its current rate case, AEP Ohio has proposed a new suite of demand-side management programs (DSM Plan) which, as stated in testimony from the company, "represents a return to a
more traditional utility role of engaging customers to help manage the peak usage of
energy along with ways to reduce energy through more efficient technology."
"The Company is seeking approval of its DSM Plan to invest approximately $40 million
annually through base rates to provide a diverse suite of programs to cost effectively help
customers optimize their peak demand and overall energy use to save money and resources.
This DSM Plan supports the AEP Ohio mission to benefit our customers and represents a
return to a more traditional utility role in energy efficiency, demand response, low-income
programs, pilots, and customer education and awareness for the Company," AEP Ohio said
"These programs support AEP Ohio’s vision of becoming the trusted energy advisor for our
customers," AEP Ohio said
Notable among the proposed programs is a Residential Demand Response program which, "lowers peak demand through behavioral coaching and incentivizing demand
response (DR) by residential customers."
According to AEP Ohio's Residential Demand Response plan, "Demand response and peak shaving will be provided with
combinations of: electric water heating, air conditioning, space heating with smart thermostats, and
EV charging control. These DR events will be targeted for reducing the demand during peak periods."
AEP Ohio said that, "Incentives will be provided to the customers who participate in the demand response
events. The goal of the program is to initially use incentives and customer communications to shift
demand, then educate the benefits of changing behavior, and finally migrate customer to a
distribution rate plan that best benefits the customer. Once this successful transition of modifying
customer behavior occurs, an incentive will no longer be provided to that customer. Incentives will be
used to reach and educate other customers to continue to grow participating customers."
response program also includes a customer home energy report element targeted to high usage and
high demand customers to educate the customer on rate designs, incentives, etc. to influence energy
and demand savings over the course of the year," AEP Ohio said
AEP Ohio also proposed a residential Efficient Products program
"This DSM program provides retail incentives for LED specialty lighting and incentives for efficient
heating and air conditioning (Energy Star Heat Pumps and Mini Split Heat Pumps), appliances and heat
pump water heaters. In addition, incentives for demand control devices are included such as smart
thermostats and load controllers," the company said
Most notably, "This program includes a digital marketplace where consumers can
compare energy efficient appliances, receive an energy efficiency rating to help them make an
informed decision, and shop for efficient products. The program will also explore midstream
opportunities for delivering incentives," AEP Ohio said
AEP Ohio also proposed a Business Demand Response program
This Business DSM program has multiple components. "DR events will target 2 components: (1) where control of
thermostat/HVAC, electric transportation, managed process, water heating is available, and (2) where
control of networked lighting can reduce lighting levels during peak periods. AEP Ohio will call these
DR events when the system demand is at its highest. These DR events will be targeted for reducing the
demand for PJM critical peaks. While this program is not currently shown to be cost effective, AEP
Ohio believes this program still has value and will be piloted in the Innovation and Technology
program to determine more cost effective approaches. AEP Ohio will allocate dollars from other
business sector programs or pilot funds if cost effectiveness is achieved," AEP Ohio said
AEP Ohio said that it will bid DSM Plan Resources into PJM, as opportunities are
AEP Ohio proposed that 80% of PJM revenues received will be utilized to supplement the DSM Plan
budget in the years the revenues are realized, with 20% retained by the company. The
company will bid eligible resources into base residual auctions, incremental auctions, or
both at company discretion to manage risk and optimize revenue.
The cost of the DSM Plan is $36.6 million annually