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 ElectricityJ. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 1

TOU for Tenants: Pay for What and When you

Use ElectricityJoseph S. Lopes

Senior Vice PresidentApplied Energy Group, Inc.

Hauppauge, NYwww.appliedenergygroup.com


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


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


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


Submetering – Price SignalUnder Submetering, pay for What you use (Fair!)• Usage varies much more than one might expect –

even the same apartment size

15,892

23,308

29,926

31,910

5,679

10,036

13,882

15,899

1,562

3,067

4,577

3,743

Studio

1BR

2BR

3BR

Apa

rtm

ent S

ize

0 5 10 15 20 25 30 35

Thousands

Waterside Plaza - Building 10Range of Annual kWh Consumption by 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


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!

434

551 574 551 532

405

488446 468 449

420 396

328

405 421 402 380

287

353323 346

311 286 272

June 2004July 2004

August 2004Sept 2004

Oct 2004Nov 2004

Dec 2004Jan 2005

Feb 2005Mar 2005

April 2005May 2005

0

100

200

300

400

500

600

700

Mo

nth

kW

h

Owners/Participants (P) Renters/Non-Parts. (NP)

ClintonHill - All Buildings: Time-of-Use BillingAverage Monthly kWh: Shadow Period

Within the same building, submetered apts. Used 39% less than non-submetered apts. (renters)


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


Better Price Signals for Submetering

• Two residents using the same monthly kWh may contribute differently to costs

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

kW

Peak User Off-Peak User

Typical Apartment Load ProfileHourly Load by Temperature

<--Utility Peak->

BuildingPeak

<--------Peak Hours------------------->

<--Shoulder Hrs-> <--Shoulder Hrs->

Weekend Hours are off-peak

<-----Off-Peak Hours---->


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 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 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 Program Rates

Weekdays -----------------------------Peak Hours: 2-6 pm (red)Shoulder 10am-2pm, 6-10pm (yellow)Off-Peak 10pm-10am (green)

--------- Weekends/HolidaysNo Peak hoursShoulder 6-10pm (yellow)Off-Peak 10pm-6pm (green)

TRAFFIC LIGHT GUIDE TO TOU

RED: Stop; YELLOW: CautionCaution; GREEN: Go!


TOU Program Rates

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

TRAFFIC LIGHT GUIDE TO TOU

RED: Stop; YELLOW: CautionCaution; GREEN: Go!


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

CP CP CP CP

OP OP OP OP OP OP OP OP OP OP

SH SH SH SH

PK PK PK PK

SH SH SH SH

OP OP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0

10

20

30

40

50

60

70

80

90

100

To

tal M

ete

r kW

0

2

4

6

8

10

TO

U R

AT

E L

EV

EL

(M

ult

iple

of

Off

-Pea

k P

rice

)

Peak Day: 01/10/2005

Weekday

Weekday TOU Price Level (right scale)

Critical Peak (Right Scale)

Building 325 - Master Meter


Weekend day typical apartment hourly profiles, compared to TOU rate periods and price levels

OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP

Sh Sh Sh Sh

OP OP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240

10

20

30

40

50

60

70

80

90

To

tal

Me

ter

kW

0

1

2

3

4

5

6

7

TO

U R

AT

E L

EV

EL

(M

ult

iple

of

Off

-Pe

ak

Pri

ce

)

Wkend/Holiday Peak Weekend Day Weekend TOU Price Level(right scale)

Building 325 - Master Meter11/12/2004 - 12/11/2004

TYPICAL WEEKEND DAY ENERGY PROFILE


TOU Pilot Case Study ResultsDuring July shadow billing, 55% of TOU participants (below) would have saved (avg $2 = 3%) vs. only 46% of non-parts.

0.4% 1.7% 1.9%6.4%

37.6% 36.2%

8.3%4.2%

1.4% 0.6%

$ -11

.00

to $

-8.8

0

$ -8

.80

to $

-6.6

0

$ -6

.60

to $

-4.4

0

$ -4

.40

to $

-2.2

0

$ -2

.20

to $

0.00

$ 0.

00 to

$2.

20

$ 2.

20 to

$4.

40

$ 4.

40 to

$6.

60

$ 6.

60 to

$8.

80

$ 8.

80 to

$11

.00

Pay More Pay Less

$ Saving Ranges

050

100150200250300350

Co

un

t b

y $

Sav

ing

s R

ang

e

Count %

ClintonHill - All Buildings: Time-of-Use BillingMonth ending early August 2004 (participants only) (831 apts)

|

|

|

|

|

|


TOU Pilot Case Study ResultsDuring Fall Month (below) shadow billing, 65% of TOU participants would have saved (avg $3, 6%) vs. 51% of non-parts.

0.3% 1.3% 2.1%

10.9%

20.8%

41.0%

18.0%

3.8% 1.3% 0.0%

$ -1

5.00

to $

-12.

00

$ -1

2.00

to $

-9.0

0

$ -9

.00

to $

-6.0

0

$ -6

.00

to $

-3.0

0

$ -3

.00

to $

0.00

$ 0.

00 to

$3.

00

$ 3.

00 to

$6.

00

$ 6.

00 to

$9.

00

$ 9.

00 to

$12

.00

$ 12

.00

to $

15.0

0

Pay More Pay Less$ Saving Ranges

050

100150200250300350

Co

un

t b

y $

Sav

ing

s R

ang

e

Count %

ClintonHill - All Buildings: Time-of-Use BillingMonth ending early November 2004 (participants) (707 apts)

|

|

|

|

|

|


TOU Pilot Case Study ResultsAnnually, 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.

47%50%

45%43% 42%

55%

48%43%

40% 40%42% 41%

55%59%

51%

60% 59%65%

56% 55% 55% 55% 55% 56%

June 2004July 2004

August 2004Sept 2004

Oct 2004Nov 2004

Dec 2004Jan 2005

Feb 2005Mar 2005

April 2005May 2005

0%

10%

20%

30%

40%

50%

60%

70%

Pe

rce

nt

Sa

ve

rs

Owners/Participants (P) Renters/Non-Parts. (NP)

ClintonHill - All Buildings: Time-of-Use BillingPercent Savers under TOU Rate (vs. flat rate): Shadow Period


TOU Pilot Case Study ResultsBuilding (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

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240.35

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

We

ek

da

y -

Mas

ter

Me

ter

kW

/ap

t

Building 355 - Master Meter -High % Participants

Building 193 - Master Meter -Low % Participants

Clinton Hill ApartmentsSubmetered vs. Non-submetered Building Analysis

05/ 30/2005 - 06/28/2005

|Peak Period->|

Average Weekday load profile dips for high participant building at 2pm start of peak period


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

Pe

ak

Da

y -

Ma

ste

r M

ete

r k

W/a

pt

Building 355 - Master Meter - High %Participants

Building 193 - Master Meter - Low %Participants

Clinton Hill ApartmentsSubmetered vs. Non-submetered Building Analysis

05/ 30/2005 - 06/28/2005

TOU Pilot Case Study ResultsBuilding (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

|Peak Period->|

Peak Day load profile dips for high participant building at 2pm start of peak period

Reduction in usage more significant on Peak Day than Average Weekday


TOU Pilot Case Study ResultsBuilding (355) with High Percentage (87%) of Participants – Weather sensitivity of Daily kWh = 44.3 kWh/CDD65

0 5 10 15 20 25

CDD65

1000

1200

1400

1600

1800

2000

2200

Day

kW

h

Actual Predicted

Building 355 - Master MeterDaily kWh vs. Cooling Degree Days: June 9 - 28, 2005

Day kWh = CDD65 * 44.3 + 1142; R2 = 72.7%


TOU Pilot Case Study ResultsBuilding (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

0 5 10 15 20 25

CDD65

1000

1200

1400

1600

1800

2000

2200

2400

Da

y k

Wh

Actual Predicted

Building 193 - Master MeterDaily kWh vs. Cooling Degree Days: June 9 - 28, 2005

Day kWh = CDD65 * 51.2 + 1130; R2 = 76.6%Base load nearly the same as High-Participant Building (1130 kWh vs. 1142 kWh)


TOU Pilot Case Study ResultsBuilding (355) with High Percentage (87%) of Participants – Weather sensitivity of Coin Peak (2-6pm) kW = 1.82 kW/CDD65

0 5 10 15 20 25

CDD65

40

50

60

70

80

90

100

Av

g 2

-6p

m k

W

Actual Predicted

Building 355 - Master MeterAvg 2-6pm kW vs. Cooling Degree Days: June 9 - 28, 2005

Max kW = CDD65 * 1.82 + 44; R2 = 69.7%


TOU Pilot Case Study ResultsBuilding (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

0 5 10 15 20 25

CDD65

40

50

60

70

80

90

100

Av

g 2

-6p

m k

W

Actual Predicted

Building 193 - Master MeterAvg 2-6 kW vs. Cooling Degree Days: June 9 - 28, 2005

Max kW = CDD65 * 2.19 + 44; R2 = 70.9%

Base demand the same as High-Participant Building (44 kW)


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


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


NOTES


Notes

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

Documents

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