Understanding how rate design can meet utility objectives
Puget Sound Energy (PSE) provides electricity to over 1.2 million customers and natural gas to 900,000 customers in Western Washington. For decades the region has relied on clean, affordable hydropower. Today, population growth and electrification are driving increased demand while hydropower outputs have decreased.
To meet this increasing demand with existing resources while remaining compliant with the Washington State Clean Energy Transformation Act, PSE implemented a Time Varying Rate (TVR) pilot in 2023 to better understand how rate design could help meet its goal of providing clean, reliable, and affordable energy to all customers.
Through the pilot, 175,000 pre-selected residential electric and 40,000 Small to Medium Business (SMB) customers were recruited to enroll in the two-year pilot program to study the impact of rate design to encourage customers to shift energy usage away from peak demand times – to maintain reliability, conserve energy, and drive potential cost savings for the customer.
PSE tested residential and SMB Time-of-Use (TOU), peak time rebate, and Electric Vehicle (EV) rates with a plan of rolling these out to the full residential customer base in the future. The pilot measured customer rate adoption, load shift, and customer bill savings.
Rates can be complicated, with most customers unaware of their rate plan. PSE engaged Uplight and GridX to manage customer rate education and communications to help customers find and enroll in the best rate plan for them. Through a randomized controlled trial (RCT) pilot design, PSE recruited customers for the pilot by sending each customer one print and one emailed personalized Rate Education Reports (RERs).
Increased Enrollment: The multichannel customer engagement strategy exceeded enrollment targets for each of the three Time-of-Use rate variants by 142%-200%.
Customer Action: The use of bill comparisons and ‘what if analyses’ led to increased customer understanding and motivation to switch to a new rate.
Impact for Low-income Customers: The pilot generated a new approach to serve low-income customers, featuring rate discounts and free smart thermostats.
Read the full case study to dive deeper into how PSE’s collaboration with Uplight and GridX is improving rate engagement and enrollment to achieve clean energy goals.
“Not only did PSE exceed our enrollment targets prior to the residential launch, but 94% of customers reported that they took action to reduce usage during winter TOU periods—proving that our Rates Engagement solution drives both participation and action.”
Clint Stewart
Sr. Product Development Manager, PSE