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More BGE customers earning bill credits for cutting back

Baltimore Gas and Electric Co. said 640,000 customers earned a credit on their bills last week for cutting back on electricity, the biggest test of a fledgling program aimed at reducing demand on hot days.

The "Energy Savings Day" on Wednesday — part of BGE's voluntary Smart Energy Rewards program — earned people who bumped up their thermostats or made other changes an average of $6.80. It was the first such savings day of the summer.

Dan Benner, an art director who lives in Annapolis, unplugged his power strips, turned off the lights, set his thermostat to 80 degrees and left for work. Because the time period when reductions count runs from 1 p.m. to 7 p.m., he only had to suffer the higher temperatures in his house for about 15 minutes. His bill credit: $9.75.

"That was definitely more than I'd expected I would get," he said. "I'll probably try to push even further next time."

Wednesday was the first occasion that Benner — and roughly half a million other customers — could participate. The program is open only to residential customers with a smart meter, a device that allows BGE to track usage throughout the day.

The utility, which began installing smart meters in 2012, said 819,000 of its 1.2 million electric customers were eligible for last week's energy-savings day. Just 315,000 could take part last summer, when BGE launched the program.

Milder weather this July have left eligible customers with fewer opportunities to save. BGE had called three energy-saving days by this point last year.

The program is a different animal than BGE's PeakRewards, in which participants get credits for allowing the company to cycle their air conditioners on and off during high-demand days. Customers don't sign up for energy-savings days, and they decide what changes to make — or not make.

BGE then compares their usage to their levels on comparable days in the previous two weeks and pays $1.25 per kilowatt hour saved.

It's a carrot rather than stick approach to cutting usage when hot weather puts more demands on the region's electrical grid. Reducing peak usage — BGE's Ruth Kiselewich equates it to shaving the top off a mountain — puts downward pressure on future energy prices. All customers are seeing some effects this year from earlier reduction efforts, not just those who have cut back, BGE said.

States in regions that don't have many power plants are more active in managing demand, said Stephen George, a senior vice president at Nexant, an energy consulting firm. Some utilities use rebate programs like BGE's, while others offer programs that vary the rate customers are charged — less at low-demand times and more during peak stretches.

"There's a big debate in the industry" about which way is better, George said.

BGE ran a four-year pilot to test different approaches before launching its program. The rebate method saved just as much electricity as varying the rate, and customers liked it better, the company said.

"Obviously customers are going to be much more satisfied if you use the carrot, and given that we were getting load reductions that were comparable, there was no reason to penalize somebody," said Kiselewich, who oversees demand-management programs at BGE.

But George sees a downside. It's simple to calculate how much to charge a customer if you vary rates by the time of day. Figuring out a rebate for usage reduction is far trickier because it requires a baseline number for comparison, he said.

The baseline a utility picks might be accurate for the entire territory on average, but "for any individual customer on any particular day, it's impossible to get it right," he said.

"So customers can get rebates for doing nothing … or they can be paid for less reduction than they're actually providing," George said.

For some BGE customers who participated in last week's energy-savings day, the appeal wasn't just the lure of a rebate. It was the inherent challenge.

Jonathan Jones, a BGE customer from Marriottsville who also participates in the PeakRewards program, said his retired wife turned on the fan rather than the air conditioner during the day and avoided using other appliances. When Jones got home from work, he put off cooking dinner until 7 p.m.

"It was novel and kind of fun," he said. "We enjoyed it."

They reduced their usage by 20 percent.

"We're not big users, so it was only $4 for us," Jones said. Still, "that's a typical day's usage — so we got that day's electricity free."

jhopkins@baltsun.com

twitter.com/jsmithhopkins

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