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Informed consumers conserve for cash, study says

Smart-grid study shows people significantly conserve electricity when given financial incentives and tools to modify habits.

People will significantly conserve electricity during peak demand if given price incentives and tools to modify usage, according to a new study.

Oklahoma Gas & Electric (OG&E), a utility company and a subsidiary of OGE Energy, announced this week the interim results of a study that was required as part of a $130 million grant from the American Reinvestment and Recovery Act. The utility used the grant to create a smart grid with 42,000 smart meters.

The study, conducted in conjunction with the Lawrence Berkley National Laboratory, consists of 3,000 OG&E consumers in Norman, Okla., who volunteered to participate.

OGE Energy

OG&E randomly chose participants to receive a peak-hour pricing structure, in which consumers were charged more for using electricity during peak usage times than at other times. Other participants were offered peak pricing and tools to monitor and modify their habits. OG&E partnered with Silver Spring Networks, a company that makes consumer smart grid-monitoring software, to track the usage patterns of customers, which included small businesses and residences. The hypothesis, based on responses in other markets and previous consumer smart grid studies, was that peak pricing and more control over usage would lower peak-electricity demand. So far, that has proven correct.

The first collection of data, taken from June through September, found that on average customers who were offered peak pricing, but no smart tools, reduced electricity use during peak periods by 33 percent. Customers using smart thermostats and offered peak pricing, reduced electricity use during peak times by as much as 57 percent.

On days that included peak pricing time periods, the average energy reduction overall for the entire day was 11 percent to 33 percent, depending on the smart tools used, according to the study.

OG&E also interviewed consumers to determine their attitudes and how they chose to use the tools they were given.

"Some pre-programmed their thermostats to respond to higher peak prices. Some simply put a note on the refrigerator as a reminder, and others wanted to graph their energy use along with summer temperatures to identify ways to better manage their electricity," Ken Grant, managing director of OG&E's smart grid program, said in a statement.

The ongoing study is expanding to 6,000 customers in 2011 with OG&E asking volunteers to enroll by April 18.

The OG&E results concur with the PowerCentsDC smart meter program study in Washington, D.C., which found that regardless of income level, consumers will conserve energy when offered pricing incentives. That study also found that consumers are more likely to turn down air conditioning during hot weather for the sake of saving energy, but less likely to turn down heat during cold weather.