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Puget Sound Energy's Demand Response Program Challenges and Opportunities Gary B. Swofford, Puget Sound Energy

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Puget Sound Energy's Demand Response Program Challenges and Opportunities Gary B. Swofford, Puget Sound Energy Puget Sound Energy’s Demand Response Program Challenges and Opportunities Gary B. Swofford, Puget Sound Energy Puget Sound Energy’s Demand Response Program Challenges and Opportunities Gary B. Swofford, Puget Sound Energy, Bellevue, Washington, USA Today in the U.S. wholesale electric prices are relatively stable. This was not the case just two short years ago in the western part of the U.S. At that time wholesale electricity prices were higher than they had ever been and were anything but stable. To add to the problem the Northwest part of the country was experiencing the second worst drought conditions since they started keeping records, which dramatically reduced available hydroelectric production. Puget Sound Energy (PSE) had just installed a new CIS and was 2 years into what was a planned 3-year deployment of a new AMR system. About 500,000 of its 900,00 electric customers were therefor already on the new metering system. The motivation for the installation of these systems was to drive increased efficiency and improve customer service. It was recognized however that this combination of technologies was also capable of providing the information and the billing flexibility to offer Time-of-Use and other dynamic pricing options to customers. As a result of the growing energy problems in the Western part of the country, PSE began an information only TOU program to 400,00 of its customers in December of 2000. In the spring of 2001 the program quickly moved from information only to a mandatory TOU billing program for 300,000 of PSE residential customers. The Commission did include an opt off provision for those customers who didn’t want to be part of this pilot program. The program was a big hit with customers, and those who participated in the pilot program (a little under 1% choose to opt off) shifted on average 5% of their on peak usage to off peak periods. By 2002 market conditions had dramatically changed. The price had come down substantially, the volatility all but disappeared and the differential between on peak and off peak pricing all but went away. In this environment the TOU program that PSE was providing did not produce the near term economic benefits to either the utility or the customer originally anticipated and in November of 2002 PSE choose to suspend the pilot program early. The program is currently under review by a group of interested parties and a report is to be filed with the Washington Commission this spring. There is no doubt that dynamic pricing programs have their place in any energy strategy going forward. If we are to have workable wholesale energy markets and if customers are going to be rewarded for managing and controlling their energy usage in response to changing wholesale market prices, than finding the right program design or designs is fundamentally important. Success in this effort will one day produce efficiencies and benefits that work for the industry and all customers. Biography Speaker: Gary B. Swofford Position: Senior Vice President and Chief Operating Officer Company: Puget Sound Energy Country: USA Gary B. Swofford is Senior Vice President and Chief Operating Officer at Puget Sound Energy, a diversified electric and gas utility with revenues in excess of $3 billion that serves nearly 1.3 million customers from headquarters in Bellevue, Washington. As COO he oversees the operations of the utility including energy delivery, customer service, corporate planning, facilities and information technology. After joining Puget as an engineer in training in 1968, Mr. Swofford assumed increasingly responsible engineering assignments, culminating in his appointment in 1980 as Director, Conservation and Division Services. He became Vice President in charge of Rates and Customer Programs in 1986, led Customer Operations beginning in 1994, and assumed his present position this year. Mr. Swofford serves on the Executive Advisory Board of the Edison Electric Institute and the Board of the Western Energy Institute. He remains active in the community working with Junior Achievement of Greater Puget Sound. A U.S. Navy veteran, Mr. Swofford graduated from the University of Washington and completed extension programs in engineering and utility management at Stanford University and the University of Idaho. Company Background Information Company: Puget Sound Energy Country: USA Puget Sound Energy is Washington state’s largest energy utility, providing electric and natural-gas service to nearly 1.3 million customers, primarily in the Puget Sound region of Western Washington. Puget Sound Energy’s service territory, covering approximately 6,000 square miles, is home to more than half of Washington’s population, including the cities of Seattle, Tacoma, Everett, Bellingham, Olympia, Bremerton, and the utility’s headquarters city of Bellevue. Puget Sound Energy’s customer base continues to grow at nearly twice the national utility average, increasing nearly 3 percent annually on the natural-gas side, and almost 2 percent on the electric side. A strong, well-established economic base served by the utility is anchored by a mix of heavy industry (Boeing, Weyerhaeuser), technology (Microsoft, Nintendo, Immunex, AT&T Wireless Services), retail (Starbucks, Nordstrom), international trade, and tourism. The utility subsidiary of Puget Energy (NYSE:PSD), Puget Sound Energy employs more than 2,100 people. .
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