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General-interest headlines from 2016 included celebrity deaths, a strange and surprising US election season, and extreme worldwide

weather events, but at E Source, we’ve been keeping an eye on trends and themes in demand-side management (DSM). The big news in

DSM may not have made many Twitter feeds or front pages, but what follows are some topics from 2016 that we’ve identified as top-of-mind

for utility DSM professionals, as well as related E Source content.

Ten DSM TopicsThat Made Waves in 2016

DSM-RB-27 Beth Fitzjarrald

Utility DSM teams are always on the lookout for the next big idea, so twice a year we compile a list of our favorite exciting, new programs and tell you what makes them innovative in a series of web conferences and reports. In DSM Roundup 2016: Innovative Residential Programs, we highlighted:

■ Getting energy savings from prepay programs■ Using online marketplaces to improve rebate uptake■ Southern California Edison’s Save Power Days, a peak-time rebate program that uses smart

thermostats to boost demand savings■ National Grid Rhode Island’s New Movers Program, which targets new accounts for home

energy reports, leading to an increase in savings from this program type

Innovation

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In response to Hurricane Sandy in 2012—which wreaked havoc on the electrical grid in New York and demonstrated the grid’s extreme vulnerability—the state embarked on a major initiative in 2015 called Reforming the Energy Vision (REV). By using distributed energy resources, energy efficiency, and microgrids to replace traditional components of the grid (such as power plants, substations, and feeders), REV aims to help New York withstand the stresses of climate change. In our report New York’s Reforming the Energy Vision, we highlighted key aspects of the initiative and explained its implications for utilities in other states as well as for DSM in general.

Utility Business Models of the Future

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Big Data

Rather than starting with an engineer’s measure recommendation, some DSM program planners have flipped their design model to begin with customer motiva-tions and barriers. We covered three examples in Leveraging Customer Data to Optimize DSM Program Design and Performance. Learn how:

■ Pacific Gas and Electric Co. uses personas to optimize its targeting schemes and improve communications

■ APS adopted a customer propensity scoring system and increased its direct mail response rate from 1.0 to 5.7 percent

■ Duke Energy shares data between the DSM department and the call center to provide customized messaging for customers

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Often, the only interaction customers have with utility DSM programs is through the contactors working in their homes or businesses. These key utility partners can have a major influence on the success of your programs, which is why we created the Utility Trade Ally Network Comparison 2016. We surveyed trade ally program managers at 30 utilities across the US and Canada to learn about network structures, management, and performance. The results were illuminating. For example, we discovered that a majority of respondents (68 percent) use closed networks with strict participation requirements. We also learned that about 40 percent outsource the management of their trade ally networks to third parties.

Trade Allies

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Thanks to unexpected changes in the recycling industry—including the abrupt closure of major US appliance-recycler JACO Environmental—and quickly rising efficiency baselines, many utilities are scrambling to save their refrigerator-recycling programs. For our Maintaining a Cost-Effective Refrigerator-Recycling Program in Challenging Times report, we pulled data from E Source DSM Insights, our online program and portfolio benchmarking tool, to provide recommendations for improving the cost-effectiveness of these staple utility programs. For example, we suggest moving to an upstream model, focusing on old or secondary refrigerators, or opening recycling programs to other technologies or appliances.

Refrigerator Recycling

The presence of Tesla in the home battery market ensures that this technology garners a lot of media attention. But how do your customers feel about battery storage? Turns out they love it! To meet customer demand for this emerging technology, utilities are starting to offer programs and pilots. We found a dozen customer-sited (behind the meter) offerings, ranging from traditional rebates to utility-owned-technology pilots. We dug into these programs and created a first-ever review of Customer-Sited Battery Storage Pilots and Programs, which features data on:■ Program type and purpose■ Technology ownership■ Rebates and incentives■ Number of customers■ Sectors■ Technology partners

Battery Storage

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Every year, to help you see how your DSM portfolio stacks up to those of other utilities across the US and Canada, we collect portfolio- and sector-level data from E Source DSM Insights for a variety of DSM program types. In 2016, DSM Achievements and Expenditures included results from more than 55 electric and gas utilities, and featured program data from the residential, nonresidential, and low-income sectors as well as the commercial and industrial (C&I), behavioral, multifamily, new construction, and small business subsectors. Our research revealed:■ Most utilities exceeded their overall savings projections for both electricity and natural gas■ Residential behavior, multifamily, and new construction programs are playing increasingly

important roles in achieving cost-effective electric savings■ C&I programs tend to achieve greater gas energy savings per dollar than residential programs

DSM Program Benchmarking

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We’ve been tracking smart thermostat programs since the technology started showing up in DSM portfolios. In our most recent update of Smart Thermostat Pilots and Programs, we provided data from 75 US and Canadian utilities that offer a total of 97 pilots or programs centered on smart thermostats. Most of the programs target energy efficiency, but some enable demand response and others are purely promotional. Among US states, Illinois and Texas lead the way in number of programs offered, and Ontario tops the list in Canada.

Smart Thermostats

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More and more electric vehicles (EVs) are rolling off assembly lines and into residential garages each year, and they represent a huge potential opportunity for utilities. We examined EV trends in How Utilities Are Taking Charge of Electric Vehicle Adoption and made several surprising discoveries. Time-of-use (TOU) rates are the most common utility incentive mechanism for EVs—35 utilities in 17 states embrace this model. TOU rates can be a win-win for customers and the utility because they offer customers an incentive to charge during off-peak hours while smoothing peaks and valleys for utilities. EV buyers are less satisfied with their sales experience than buyers of conventional cars, according to JD Power. Utilities should take steps to educate and support EV dealers in their territories to improve the customer experience and encourage market growth.

Electric Vehicles

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Prepay Programs

Utilities are starting to recognize the potential benefits of offering customers a prepay billing option. Two utilities, SRP and APS, are actually claiming savings from prepay, and other programs are seeing savings from 5 to 14 percent. For our report Claiming Savings from Prepay Programs, we discussed the current state of prepay, explored its savings potential, and presented the two Arizona programs as case studies. We also identified the most-effective audiences for prepay, including vacation home owners, customers on daily or weekly budgets, and those for whom a connection fee or deposit is a major barrier.

For 30 years, E Source has been providing market research, data, and consulting services

to more than 300 utilities and their partners. This guidance helps our customers advance their efficiency programs, enhance customer relationships, and use energy more efficiently.

For more information, visit www.esource.com, email esource@esource.com, or call 1-800-ESOURCE.