Community Energy Savings: Smart Thermostat Program
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November 2022
By Zachary Hoffman, manager of communications and publications
Capacity and transmission costs continue to rise, causing an increasing burden on public power utilities. According to findings from AMP’s Power Supply Department, collectively, our member’s capacity and transmission charges have increased by an average of 19.7 percent and 25 percent since 2019, respectively.
In response, American Municipal Power, Inc. (AMP) has worked with members to improve peak shaving activities. As part of these efforts, the Community Energy Savings: Smart Thermostat Program was developed.
First introduced to AMP members in July 2022, the Community Energy Savings: Smart Thermostat Program is a subscription-based service that uses a distributed energy resource management system (DERMS) to manage enrolled Wi-Fi connected thermostats during summer peak demand events. Through this program, AMP members can combat increasing transmission and capacity charges by reducing their system peak demand through management of connected residential technologies, focused initially on smart thermostats.
“Our goal is to provide a new way to help our members save on power supply costs while providing a low-cost, positive program for Members to engage with their customers,” said Erin Miller, AMP assistant vice president of energy policy and sustainability. “The Community Energy Savings: Smart Thermostat Program enables utilities and their customers to reduce energy demand on the system and save the entire community money in power supply costs.”
The Community Energy Savings: Smart Thermostat Program is completely voluntary and consumer friendly, which is different than similar programs across the nation. After a member community signs up for the program, their residential customers voluntarily enroll using an app or email notification. Then, whenever AMP or the member utility calls for a peak-shaving event, the DERMS platform would schedule enrolled thermostats to pre-cool and adjust set temperature or cycle during the event. For each event, members’ customers are free to decide whether they will participate. In addition, participating members’ customers are free to use whatever smart thermostat brand they prefer.
Once a member has signed up for the program and has enrolled customers, they can begin participating in automated peak-shaving events. The program is limited to a maximum of 15 peak events per year, with each event running for no more than four hours. Only during emergency situations would an event be called during a weekend or holiday. Additionally, participating member utilities are free to opt out of any peak event that AMP recommends, and they may also schedule their own peak event at any time, simply by notifying AMP’s Dispatch team.
After the program launches, member customers will receive notification of each event via their thermostat app and/or email. From there, if a customer chooses to opt out of an event, they can do so without penalty via the thermostat itself or in the thermostat app. They may do this before or even during the event.
Based on the DERMS provider findings, about 88 percent of customers participate in peak events, and there is a 95 percent customer retention rate in the program over two years. Based on these figures, participating members could see approximately 1 kilowatt of savings for each enrolled thermostat per peak event.
“There are a lot of savings that can be unlocked with this program,” Miller said. “Based on the findings of our DERMS provider, even opt-out customers contribute to the average load shed when notified of peaking events because they slightly alter their electric usage. It is encouraging that one customer’s participation lowers the capacity and transmission costs for the entire community.”
Participating members will be charged $80 per thermostat enrolled per year, though members who enroll in the program prior to Dec. 31, 2022, will not be charged the per-thermostat fee in the first year if they commit to enrolling at least two percent of their total residential meters. Participants will be billed monthly on their power supply bill beginning in January 2024. If collectively, among all participating members, the program does not maintain the minimum 2,300 thermostats and the members do not reach or maintain two-percent minimum enrollment each year, a proportional true-up will occur.
As approved by the AMP Board of Trustees, AMP is currently determining member interest in participating in the program. If a critical mass of interested members and thermostats has been reached, AMP will enter a contract with the DERMS provider for a period of five years, starting in January 2023.
A presentation providing additional details about the Community Energy Savings: Smart Thermostat Program is available on the AMP Member Extranet (login required). Members who are interested in learning more about the program can contact Erin Miller at [email protected], or Corey Hawkey at [email protected].
