PSE&G Pursues New Technologies to Give Consumers Greater Control Over Energy Use, Bills

April 7, 2006
PSE&G is pursuing promising new technologies aimed at giving consumers greater control over their energy use and monthly bills.

Public Service Electric and Gas Company, New Jersey, is pursuing promising new technologies aimed at giving consumers greater control over their energy use and monthly bills. A new program being piloted by the utility is helping to determine whether people are willing to conserve energy when armed with timely information about price fluctuations. Industry leaders contend that if enough consumers are willing to respond to prompts by cutting back during peak periods, there might be less strain on utility budgets and on the energy grid.

The myPower pilot program is good news for those who are concerned about rising energy supply prices. "While we can't control the cost others charge us for supplying electricity, we can control how aggressive we are when it comes to giving our customers the power to manage their bills," said Ralph Izzo, president and COO of PSE&G.

Utility officials believe that the technologies being tested will allow customers to become more savvy consumers by helping them understand when and how to control their energy consumption. Special "smart" thermostats capable of two-way communication will allow the utility to "see" the decisions consumers are making in real-time, as well as detect and correct any problems with the equipment. The result is real information about how consumers respond when faced with information about the cost of supplying energy in times of high demand.

PSE&G began testing the first segment of the pilot in June 2005 and plans to expand the program this summer, allowing customers to use the two-way communication equipment to test new pricing plans. Eight hundred select customers in Cherry Hill and Hamilton Townships will be given the opportunity to adjust their energy usage based on information about changing energy prices relayed to their thermostat. They will be able to save money by shifting their energy use to times when energy prices are lower, such as evenings and weekends.

PSE&G began the myPower pilot last summer, providing select electric customers monetary incentives for their voluntary participation in the program. "Smart" thermostats were installed in the homes and businesses of 200 of the utility's customers. Signals sent to their thermostats during periods of high energy demand indicated that the amount of energy being used by their building's central air conditioning unit needed to be reduced. Participants had the option to adjust the thermostat to override the command, either manually or through the internet, but most chose not to do so and allowed their central air conditioning to be curtailed until the demand subsided.

This segment of the pilot is an improvement upon PSE&G's existing "Cool Customer" program, which performs similarly but doesn't give customers the option to override the cycling command or allow the utility to validate that the signal was received.

The majority of customers surveyed indicated satisfaction with the pilot program. Carl Venable, owner of Alphagraphics in Edison, was one of the first to enroll in the program when it was offered last summer. "As a small business owner, it's important that I keep my customers and employees comfortable, manage my money wisely, and find ways to help the environment," he said. "With this program I am able to do it all, and it is transparent to my business."

The Energy Policy Act of 2005 requires utilities and state regulatory commissions to study and evaluate methods of demand response. The myPower program addresses these requirements, and positions New Jersey as a leader in this area.

PSE&G has worked closely with the BPU throughout the development of the pilot program, and it may some day be available to customers throughout the company's service territory.

"This has the potential to change the way people think about their energy consumption. The goal is to preserve the comfort and convenience customers expect but at a lower cost," Izzo said. "I am excited about the possibilities."

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