How utility companies lower electricity use by controlling your thermostat
Utility companies want to be able to make the demand go up and down just as much as the supply fluctuates.
Author: Pat Dooris
Published: 11:47 AM PST February 13, 2020
Updated: 4:24 PM PST February 13, 2020
LOCAL 6 Articles

PORTLAND, Ore. — Across the West, the days of many coal-fired electric plants are numbered.

Utilities know a time is coming when they will not be able to count on the constant power generated by those plants.

One side of the equation involves creating more renewable sources of energy like wind farms and solar plants. The other side is getting customers to use less power, or use it at times with lower demand.

Because unlike coal, with its steady, although relatively dirty supply, wind turbines only make power when the wind blows. And solar panels only create electricity when the sun shines. So the utility companies want to be able to make the demand go up and down just as much as the supply fluctuates.

And here’s the tricky part: That demand must happen at the same time as the supply is going up or down.

“Energy is the only commodity that has to be consumed the instant its generated. And the grid, as you can see, has to always be in balance,” said Jason Salmi Klotz with Portland General Electric.

But how can you quickly move demand down when the wind stops blowing? Or move it up when the sun shines?

That’s what we will focus on in this story because it's a big part of what’s coming in our energy future and the future is being created right now.

Whether you like it or not, it will have a direct impact on you.


How utility companies lower electricity use by controlling your thermostat

Chapter 1

Smart thermostats

Henry Hall is already living one version of the energy future at his Southeast Portland apartment. He’s part of a demand-response program designed to see whether his utility can get him to lower his power use when demand is high.

“So, this here is my Nest thermostat. It’s a second-generation thermostat,” he said, leading us to his upstairs landing where the thermostat is located.

Hall is one of 20,000 Portland General Electric customers taking part in a smart thermostat experiment. He allows the power company to automatically turn his thermostat down when it's very cold outside and everyone else is turning up the heat.

That is called a "peak demand event" because the demand for energy is peaking.

In the summer, Hall allows PGE to turn his air conditioning down when it's very hot during a peak event.

“They’re really good about letting you adjust it yourself if you want to, if it's uncomfortable. But they also pre-adjust. So, if it’s gonna be a hot day and they’re expecting high air conditioning usage they will turn it down in advance to make the house colder," he said. "But it will warm up.”

A couple degrees up or down does not sound like much. But if PGE could get all 881,000 customers to take part, that would add up in a big way and help them move demand up or down to match the supply.

Chapter 2

Is it too intrusive?

There is another big hurdle to clear: the psychological impact of knowing the power company can intrude into your life, literally into your home or business.

The utility knows it’s a touchy subject.

That was clear when Salmi Klotz was asked about PGE controlling people’s thermostats.

“I mean, I don’t, we don’t control the thermostat. That’s a bit intrusive. Customers don’t want that,” Klotz said.

Technically he is correct. PGE sends a message to the Nest company and Nest controls the thermostat.

Some, like Hall, are fine with it either way. He is not concerned about the company controlling his furnace or air conditioning.

“Not really,” he said. “If I want to control it myself I can just disconnect it from the wireless.”

Another PGE customer named Kelly Piper is also part of the thermostat control experiment.

“I’m energy conscious. I try to be aware of my energy usage,” she said.

Piper has another type of smart thermostat called an Ecobee in her Corbett home.

“They will adjust my temperature by two degrees either higher or lower whether it's summer or winter depending on the event for two hours and I’m fine with that,” she said.

Chapter 3

New technology

As you might expect with an experimental program, it hit a few bumps in the road.

Piper’s first couple messages, sent to her thermostat which has a screen for messages, made no sense.

"It said something about 'Your thermostat will be increased by negative three degrees higher over the next four hours.' And I thought, 'What?'" Piper said.

She was also frustrated that the program did not consider her current temperature settings.

“If there’s a high demand on the grid system and they want to adjust the system, I have no problem with that. But they adjust it blanketly to everyone by two degrees regardless of where your thermostat is set. So, if I’m set at 64 they’ll drop it down to 61 or 62 degrees. Which is really cold!”

Her thoughts on the demand-response program so far?

“The thermostat itself is a smart program. The energy efficiency program that PGE has implemented is not so smart,” she said.

As with Hall, the program does allow Piper to override the change and turn the heat back up if she wants.

Chapter 4

Opting in

PGE has a second program that alerts customers who do not have smart thermostats that a peak event is coming and asks them to turn the thermostat up or down themselves.

Both programs offer a few dollars for taking part in the peak demand events.

The thermostat control is just the beginning.

Not too long from now, with your permission, computers from the power company could also control your hot water heater, your refrigerator, your rooftop solar panels and more.

It will allow them, on a large scale, to lower energy use when supplies are low and demand is high.

There is a lot of work to be done before that is reality. Still, PGE has evidence it may work at some level.

On Aug. 28, 2019, the temperature hit 97 degrees in Portland for the second day in a row. PGE declared a peak event for that afternoon and early evening. It asked its customers taking part in the experiment to turn down their power use, meaning air conditioners and fans, and many did.

Salmi Klotz pointed to a power use graph that showed a dip in use for that afternoon.

“By asking customers to reduce for just a short period of time, we were able to find 50 megawatts that we didn’t have to purchase on the market. That meant that we saved customers a whole bunch of money,” said Salmi Klotz.

The electricity saved was about equal to the amount used to power 40,000 homes for that time period.

But it’s hard to get customers to take part in large scale demand-response programs.

PGE gets 2% to 7% of its customers to take part right now.

They will need much more than that in the future. The company’s projections estimate PGE will need as high as a 66% participation rate.

Chapter 5

Opting out

That is why the company is running another experiment, automatically enrolling PGE customers in Milwaukie, North Portland and South Hillsboro without asking if they want to be part of the program, then offering them different incentives to see what works best.

Customers are still able to opt out.

It’s all geared toward giving the power companies maximum flexibility in the future as their supply of electricity moves up and down. And it will take some getting used to.

Salmi Klotz agreed that the psychology of the customer is one of the biggest hurdles.

“So we would like for people to get it, love it and forget about it,” he said.

Which is why PGE is also running a water heater experiment to test whether people even notice when the company controls it.

A PGE contractor installed remote controlled switches on every water heater at the Monte Vista apartments in Southwest Portland.

“There’s an algorithm inside the switches that we use on these water heaters, that take into account when the customer wants hot water, when they’re usually using hot water and that balances our request for services. But it always puts a priority on the customer for receiving the hot water,” said Salmi Klotz.

The apartment ownership loved the idea.

“So, it was brought to our attention that it was something we were very interested in doing,” said manager Libby Dickinson.

The complex has 288 apartments.

“So a little change in the energy use at each one can really add up?” We asked Dickinson. 

“Exactly,” she answered.

The switches were installed in August 2018. All the residents were informed. PGE has controlled the water heaters on 207 days since Dec. 12, 2018.

“And the customers didn’t notice,” said Salmi Klotz.

The program now includes nearly 8,000 water heaters across 55 properties. The utility's goal is 10,000 water heaters.

"And do you get any negative feedback – people saying, 'Hey, I don’t have any hot water?'" Dickinson was asked.

“We don’t,” she said.

There have been 54 complaints to PGE since the program began, but a small number of those were about hot water shortages, a spokesman said.

“The more people are around it and getting used to it and getting educated with it the more comfortable they are,” Dickinson said. “I can’t see us going anywhere other than that, the smart grid.”

Chapter 6

The ongoing power struggle

As the steady supply of electricity from coal plants becomes a smaller and smaller part of the power mix in the Northwest, more utilities will likely move to creative options to influence demand.

From thermostats to hot water heaters and even refrigerators, part of the future will involve smart appliances that can be made to turn power up or down as the supply of power itself moves.

It’s one of many ways utilities are planning now as they try to solve the power struggle, the effort to go carbon free without turning off the lights.

Learn more about PGE's smart programs

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