Danvers incentive program reduces peak electricity use and costs

MMA Innovation Award winner, From The Beacon, February 2016

With electricity use hitting its peak during the summer months due to air conditioners, dehumidifiers and pool pumps, Danvers Electric sought a way to decrease use on peak days, which would ultimately result in savings for both the municipal utility and its customers.

The solution? Offering an incentive in the form of a $10 Amazon gift card to ratepayers who voluntarily decrease their energy use on peak summer days.

One of the 41 municipal electric companies in the state, Danvers Electric settled on this “demand-response” program after researching what cities and towns across the country are doing and finding a “huge variety of programs,” according to Yrinee Michaelidis, the utility’s energy efficiency engineer.

Those programs range from different rates for different time periods, to bill credits, to utilities actually installing equipment to regulate air conditioning in homes and businesses. Danvers billing system wouldn’t allow issuing bill credits, and the utility can’t roll out time of use rates yet, so instituting a program required some creative problem solving.

“Obviously money in people’s hands or pocket is a really effective tool to encourage participation,” Michaelidis said. “We did some calculations in house to see the sweet spot for those savings, and then splitting savings with our customers.”

Residents and businesses enrolled in the Peak Savings Program receive an email alert 24 hours before a projected peak use day in the summer. They opt-in by clicking “yes” in the email, and then receive tips on how they can reduce their energy usage during the day, from turning their air conditioning up 4 degrees to holding off on running the washing machine until nighttime. Ratepayers who report taking at least two reduction measures get a gift card once their power reduction has been verified.

Along with air conditioning, dehumidifiers and pool pumps are the biggest energy hogs during the summer, Michaelidis said. “Vampire loads” – like cable boxes, TVs and computers – also use electricity even when they’re turned off. Peak electricity usage translates to capacity charges on the utility’s bill, which Danvers Electric has seen increase and forecasts will grow in coming years.

Between the demand response program and solar production, Danvers reduced its peak load last year from a forecast of 74 megawatts to 72.1 megawatts. Michaelidis attributed $80,000 in savings directly to the demand response program.

Asked for her advice to other cities and towns, Michaelidis quickly said, “Call me!” with a laugh.

“There’s a lot of development work we did that we’d be happy to share,” she said. “Customers do want this. They love being able to do something that helps them save and helps the town save. The reaction every time I sent out gift cards was so incredibly positive. It’s an excellent customer outreach tool.”

For more information, contact Yrinee Michaelidis at (978) 774-0005, ext. 651.
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