By Jordan Folks

Mount Hood, the largest mountain in Oregon, recently had its first blizzard in over a decade. Although spared blizzard conditions, nearby Portland received its fair share of ice during the storm—resulting in significant storm-related power outages throughout the city. All of the falling trees certainly didn’t help matters. As I sit here, watching the ice finally thaw from my Portland home, I’m reminded of the winter demand response conversations that dominated the last couple of conferences I attended at the end of 2023.

But—I thought demand response was a summer resource

Historically, demand response (DR) was solely a summer concern for many utilities—if a concern at all. For many of us, traditional DR evokes sunny California: we know it as an intervention to prevent blackouts, deployed when there’s not enough power to meet the demand from 15 million air conditioners on the hottest days each year. However, the demand flexibility landscape is rapidly changing, evolving beyond summer needs. OhmConnect, a peak-time rebate aggregator, called events virtually every day last year in California. Although California is no stranger to blackouts, surely its grid isn’t teetering on blackout status every day of the year.

Meanwhile, utilities in various climate zones are rapidly switching their generation mix to non-dispatchable renewables, creating new challenges for traditionally summer-peaking utilities. Xcel Energy Colorado, historically a summer-only DR utility, is now looking at year-round demand flexibility opportunities to match its new generation stack associated with its impressive clean energy goals. Xcel Energy’s other major service area is in Minnesota, which also has a winter-peak trajectory in future years. But Xcel Energy is far from the only utility on this path to year-round DR. Accordingly, the Midcontinent Independent System Operator (MISO) recently introduced a seasonal capacity construct due to emergency events occurring outside of the summer season.

On the other hand, utilities here in the Pacific Northwest have typically had excess generation capacity. However, in recent years, they have started developing expansive demand response portfolios to manage winter electric heat peaks. With the growing adoption of electrification technology in historically summer-peaking utility territories, winter peaks will become even more relevant, especially with increased heat pump adoption and decreased solar output in winter months. As air conditioning load grows in places like Washington State, summer might also need some solutions up north. Lest we forget, transportation electrification technology is seeing exponential adoption growth, and we may need nighttime DR to mitigate electric vehicle charging timer peaks in the not-so-distant future.

These topics and more were the sparks of recent presentations by Opinion Dynamics experts at the fall GridFWD and Peak Load Management Alliance (PLMA) conferences. At the GridFWD conference, I moderated a Huddle Session where we workshopped ways utilities can better prepare for winter DR needs in these evolving times. A couple of weeks later, my colleague, Kessie Avseikova, and our clients at Portland General Electric (PGE) presented at PLMA’s Fall Conference on our evaluation of PGE’s DR portfolio as part of an entire track on Winter DR. Throughout these conferences, we heard one struggle loud and clear:

“Getting residential participants in winter DR is more difficult than in summer. What are the loads, and how do we control them?”

Summer DR is a no-brainer in the residential setting—air conditioners to the rescue! But what residential end uses can we control in the winter? Sure enough, Xcel Energy Colorado is experiencing this challenge firsthand. The vast majority of its current winter DR potential comes from commercial and industrial (C&I) customers (full disclosure: Opinion Dynamics is conducting a continuous evaluation of Xcel Energy’s Colorado DR portfolio and helping them identify ways to increase their winter DR potential). Finding winter DR resources in the residential setting can be tricky. Often, it can be a technology saturation issue as many regions lack significant controllable residential electric load in the winter.

Per the latest Residential Building Stock Assessment (RBSA) estimates, most of my fellow Oregonians heat their homes with natural gas. Further, of electric heat users, non-controllable zonal heat outnumbers DR program-eligible equipment by more than a 2:1 ratio. Resultantly, Pacific Northwest utilities (like PGE, for which we provide DR portfolio evaluation services) may find significantly fewer winter participants in their smart thermostat programs when compared to summer participation levels. Although smart thermostats offer a technical source of residential winter DR, their winter DR potential can be hampered by comparatively lower levels of controllable electric heating technologies. This is particularly true in areas with high penetration of gas heat or non-controllable electric technologies like the baseboard and wall “cadet” heaters often found in single family rental homes in PGE’s territory.

What’s a utility to do?

Water heat may provide one possible solution. Although electric water heat contributes to notable morning winter peaks, it can be a fantastic source of demand flexibility without sacrificing customer comfort. Also, many technological barriers that can hold back winter HVAC DR are not as problematic for water heaters. Electric water heat may be much more common than electric space heat in areas with high natural gas heating usage, such as the Pacific Northwest. Beyond fuel-type advantages, the technology itself is much more amenable to controllability. With electric HVAC, DR is effectively limited to central forced air systems, which are not necessarily the majority of electric heating systems in the residential sector. But electric water heaters of all shapes, sizes, and vintages can be controlled. Whether via a cellular switch on standard efficiency electric tank systems or DR-ready Wi-Fi-controlled smart heat pump water heaters, electric water heaters can be successfully controlled. Further, these water heat-focused DR programs can be particularly successful in bringing the notoriously hard-to-reach multifamily sector into the DR landscape.

In addition to direct load control (DLC), behavioral interventions can harvest substantial load relief in the cold season. PGE’s Peak Time Rebates Program does just that, and PGE is seeing success with both morning and evening events. The event notification goes out, and Voila!—demand response; no DLC needed. Peak time rebate programs are a numbers game; however, so the per-customer impacts may be smaller than DLC interventions, but ginormous participant populations can stack up to significant demand savings in each event. Peak time rebates are all carrot, no stick—participants can earn rebates if they choose to participate and suffer no consequences beyond a missed opportunity if they choose not to participate. Resultantly, peak time rebate programs are immensely popular with residential customers, and utilities often see customers participating in droves.

Riding out the Storm

Just as households stock up on groceries and other essentials to ride out an impending snowstorm, utilities must begin preparing their DR portfolios for winter. Even though our planet is warming (making classic summer DR even more imperative), our winters will continue to be brutally cold. Accordingly, DR will be a critical resource to balance loads in the winter months—especially as net peaks shift to the winter season due to changing grid conditions and increased electrification. As we’ve seen with clients in varying regions, utilities nationwide will need to invest heavily in winter DR—and they may need to think creatively to expand beyond the commonly tapped C&I sector. Although the residential sector may seem more challenging to engage in the winter (because it is!), it is not an insurmountable feat. It is time to pull up our winter bootstraps and start shoveling—this winter load ain’t gonna manage itself!

About the author:

Jordan Folks is Opinion Dynamics’ Associate Director of Demand Flexibility, where he brings over a decade of research and consulting experience in the energy sector to all things flexible load. Jordan uses a social science lens to study the intersection of human behavior and energy consumption and has led dozens of high-profile studies in the energy efficiency and demand response space. As of late, his customer research focuses on innovative pricing topics, DERs, EVs, and energy equity.

For more information regarding the article, Contact:

Jordan Folks: jfolks@opiniondynamics.com