Electric Power
Demand Response, Energy Efficiency, and the Smart Grid
Overview
Engagements
Experts
Publications

Utilities, regulatory agencies, and independent system operators (ISOs) are considering innovative methods for managing demand as a means to lower power costs to consumers, improve system reliability, meet environmental standards, and ensure resource adequacy. As part of these efforts, power companies have announced initiatives and partnerships that will lay the groundwork for their involvement in the development of the “smart grid.”

The smart grid encompasses virtually all facets of the electric industry, with benefits ranging from expanded generation resource alternatives to decreased energy consumption. At the leading edge of these initiatives is a new crop of customer-focused programs that use technology and dynamic pricing signals to manage customer demand during critical time periods. Specifically, several critical peak pricing pilot programs are taking place in a handful of states around the U.S. and Canada. These pilots test several design elements including: customer response to different pricing levels, frequencies, and durations; customer acceptance of a critical peak price versus a critical peak rebate; whether to employ an opt-in or opt-out deployment strategy; and the role of different enabling technologies. The Brattle Group has assisted utilities in designing, evaluating, and implementing various customer-side smart grid initiatives.

Since most smart grid plans begin with the deployment of smart meters, it is often necessary to perform a cost benefit analysis to assess whether the capital costs associated with meter deployment will be offset by operational benefits and demand response (DR). We are an industry leader in addressing opportunities and market barriers associated with DR. We design and evaluate programs to reduce peak loads and develop energy efficiency (EE) programs to lower customer bills and protect the environment. In addition to the load, reliability, energy, and environmental benefits, well-designed programs can improve customer satisfaction, an important regulatory benchmark for judging the success of utility operations. We also assist clients with the evaluation of implemented DR programs, which requires an accurate assessment of baseline customer behavior absent the DR program. We understand how to construct the necessary “but for” scenarios, and provide reliable forecasting methods and energy economic consulting expertise in benefit-cost analysis.

Furthermore, traditional load management programs, such as direct load control, are being integrated with dynamic pricing programs. These retail-market programs are complemented by incentive-based wholesale market programs including load curtailment, demand bidding, emergency demand response, capacity market programs, and ancillary service programs. Our economic consultants evaluate such programs.

Principals
Chang_037
Principal
+1.617.864.7900
Judy Chang is an economist with a public policy background and expertise in the analysis of electricity power markets. She advises clients on financial and regulatory issues relating to renewable energy investment and procurement decisions. More-icon
Ahmadfaruqui_img_4651
Principal
+1.925.408.0149
Dr. Faruqui specializes in smart grid strategies involving the consumer. His expertise includes demand forecasting, innovative rate design, energy efficiency, demand response, advanced metering infrastructure, technology assessment, and cost-benefit analysis. More-icon
Fox-penner_131
Principal
Dr. Fox-Penner specializes in economic, regulatory, and strategic issues in network industries. His practice centers on energy and environmental policies and electric regulation, planning, and competition issues. More-icon
Hanser_080
Principal
+1.617.864.7900
Mr. Hanser assists clients in issues ranging from utility industry structure and market power and associated regulatory questions, to specific operational and strategic issues, such as transmission pricing, generation planning, and tariff strategies. More-icon
Murphy_038
Principal
+1.617.864.7900
Dr. Murphy is an engineer and economist with expertise in energy, competitive, and regulatory economics and finance, as well as quantitative modeling and risk analysis. More-icon
Newell_090
Principal
+1.617.864.7900
Dr. Newell is an expert in electricity wholesale markets, the transmission system, and RTO rules. More-icon
Tsuchida_084
Principal
+1.617.864.7900
Mr. Tsuchida specializes in the analysis of wholesale electric markets and modeling. More-icon
Jurgen_weiss0492
Principal
+1.617.864.7900
Dr. Weiss specializes in issues broadly motivated by climate change concerns, such as renewable energy, energy efficiency, energy storage, the interaction between electricity, gas and transportation, and carbon pricing. More-icon
Wharton_123
Principal
+1.415.217.1000
Dr. Wharton specializes in the development of new business models and innovative pricing policies for regulated industries. More-icon
Academic Advisors
Academic Advisor
Dr. Robinson is a Senior Fellow of the Oxford Institute for Energy Studies. He consults on competition, regulation, and corporate strategy in energy and other regulated sectors. More-icon
Senior Associates
Ryanhledik_img_4596
Senior Associate
+1.415.217.1000
Mr. Hledik has expertise in assessing the economics of smart grid investments and policies. More-icon
Sergici_102
Senior Associate
+1.617.864.7900
Dr. Sergici assists electric utilities, regulators, and wholesale market operators in their strategic questions related to energy efficiency, demand response, and customer behavior in the context of Smart Grid. More-icon
Report
Quantifying the Amount and Economic Impacts of Missing Energy Efficiency in PJM’s Load Forecast
September 2014
Prepared for The Sustainable FERC Project
Article
Smart By Default
August 2014
Published in the August 2014 issue of Public Utilities Fortnightly
Report
Impact Evaluation of Ontario’s Time-of-Use Rates: First Year Analysis
November 26, 2013
Ahmad Faruqui, Sanem Sergici, Neil Lessem, Dean Mountain, Frank Denton, Byron Spencer, and Chris King
Prepared for the Ontario Power Authority
Article
Benchmarking Your Rate Case
July 2013
Published in Public Utilities Fortnightly
Article
Surviving Sub-One-Percent Growth
June 2013
Published in Electricity Policy
Report
The Costs and Benefits of Smart Meters for Residential Customers
July 2011
Ahmad Faruqui, Douglas C. Mitarotonda, Lisa V. Wood, Adam Cooper, and Judith Schwartz
Published by The Edison Foundation
Article
Unlocking the €53 Billion Savings from Smart Meters in the EU: how increasing the adoption of dynamic tariffs could make or break the EU's smart grid investment
October 2010
Published in Energy Policy
Article
Household Response to Dynamic Pricing of Electricity – A Survey of 15 Experiments
October 2010
Published in Journal of Regulatory Economics
Article
The impact of informational feedback on energy consumption - A survey of the experimental evidence
2010
Ahmad Faruqui, Sanem Sergici, and Ahmed Sharif
Published in Energy
Article
Ethanol 2.0
December 2009
Robert L. Earle and Ahmad Faruqui
Published in Regulation
Report
The Power of Five Percent: How Dynamic Pricing Can Save $35 Billion in Electricity Costs
May 16, 2007
Published by The Brattle Group, Inc.