Tucson Electric Power is looking for volunteers to surrender control of one of the most untouchable items in every home: the thermostat.
TEP is asking regulators to approve a pilot program in which customers with “smart” internet-connected thermostats would allow the utility to cycle off a customer’s air conditioner or adjust the thermostat.
The idea is to help the load on TEP’s power grid during times of peak demand, like late afternoons on summer days.
In exchange, up to 650 participating customers initially would get an incentive payment of $40 annually, while having the opportunity to save money on a time-of-use rate plan.
TEP proposed the “residential load management” pilot program recently as part of its 2018 energy-efficiency plan to comply with a state mandate to save power through energy-efficiency programs.
Having your power company control your AC unit may sound a bit Big Brotherish, but the pilot program will be designed to allow participating customers with smart thermostats to save money without major discomfort, said TEP spokesman Joe Barrios.
Details of the program must still be worked out, a process expected to take six to nine months after initial approval, which is expected by late this year or early 2018. TEP has requested a budget of $1.3 million to get the program going.
The idea is that TEP would cycle off AC units for brief periods, say for 15 to 20 minutes at a time, within a certain temperature range. Customers could opt out on certain days when, for example, they’re home on vacation or have guests.
“It’s not like we would always have the ability to reach in and adjust it as much as we want to — we would have limited range to make adjustments,” Barrios said.
TEP has proposed $40 as an initial annual incentive payment, but that could go higher if needed to attract participants, he added.
A supporter of energy-efficiency programs applauded TEP’s proposal, while acknowledging the program may not work for everyone.
“It is a tough sell for some customers, but for other customers, if their AC is cut six or eight times a year while they’re at work, it might be a good deal,” said Jeff Schlegel, Arizona representative for the Southwest Energy Efficiency Project.
Similar programs, often referred to as “demand response” or “load control” plans, have been offered to commercial customers for years in exchange for lower rates.
“We do see firms signing up for these programs all across the country,” said Ashley Langer, a University of Arizona assistant professor of economics whose current research focuses on how consumers make decisions that affect the environment.
About 30 states have energy-efficiency mandates, and utilities in about a dozen states have adopted demand-response programs including load-control arrangements similar to TEP’s plan and incentives to voluntarily cut energy use during announced peak-demand periods.
Arizona Public Service Co., the state’s largest investor-owned utility, also has proposed a residential load-control program as part of its pending 2018 energy-efficiency plan, offering customers free smart thermostats to participate.
Langer said getting the details right, like limiting utility thermostat control to short periods or allowing customers to opt out of the program at certain times, could help persuade wary ratepayers to participate.
“You’re signing up for 15 minutes, you’re not signing up to come home to a 100-degree house,” she said.
A recent study suggests utilities have some work to do to persuade customers to hand over control of their thermostats.
A study issued in March by researchers in Australia showed that general “consumer distrust” of utilities is a significant deterrent to signing up for demand-response programs.
Langer said TEP’s proposed program also might appeal to environmentally conscious customers, since saving energy during peak times would reduce the need to fire up gas-burning turbine “peaker” generators.
In 2010, the Corporation Commission required state-regulated power companies to achieve savings of at least 22 percent by 2020, with some of that coming from reductions in peak demand.
Besides allowing remote load control, TEP’s proposal seeks to use some participating customers’ homes and water heaters to store energy. TEP also would explore “feeder-level,” or neighborhood-level, power storage in some areas to help reduce peak demand.
This isn’t the first time TEP has tried a load-control program. In 2010, the utility tested such a program with the help of a U.S. Department of Energy grant.
About 750 participants in the program, which concluded in October 2012, were given internet-enabled thermostat monitors to allow them to monitor and adjust the temperature of their home or business remotely, and each got a $50 billing credit at the program’s end.
TEP system operators were able to cycle off a customer’s air conditioner or adjust their thermostat during periods of peak electric demand, using those controls eight times on 100-degree-plus days in 2012, the utility said.
Since the last test program ended, smart thermostats like the $250 Nest Learning Thermostat have become widely adopted, so TEP can offer the program to any customers who use the devices, Barrios said.
“With this program, it’s a lot simpler,” he said, noting that TEP is currently offering a $35 rebate on the purchase of a Nest thermostat.
TEP will evaluate the Nest and other brands of smart thermostats for their performance and security and eventually list which models will qualify for the program, Barrios added.