BGE Delivers Demand Response Programs for Customer Benefits

Baltimore Gas and Electric Co. (BGE) offers programs, services and incentives to help its more than 1.2 million electric customers ...

by Cheryl Hindes, Baltimore Gas & Electric

Baltimore Gas and Electric Co. (BGE) offers programs, services and incentives to help its more than 1.2 million electric customers in central Maryland conserve energy, save money and improve the environment through the BGE Smart Energy Savers Program. The program incorporates demand response (DR), energy efficiency and conservation and will incorporate advanced metering and dynamic pricing to help reduce customer peak demand and contribute to Maryland’s goal of reducing energy and demand 15 percent per capita by 2015.

A key component of the BGE Smart Energy Savers Program is the PeakRewards initiative, arguably the most heavily subscribed residential program in the U.S. PeakRewards has attained more than 500 MW of peak load control with a 40 percent penetration of residential customers with central air conditioning. This equates to the installation of some 400,000 units (325,000 customers) for deployment of next-generation DR technology, including smart thermostats and load control switches to cycle customers’ air conditioning units during high demand. PeakRewards can reduce enough demand for electricity during peak usage to power 160,000 homes, or the generation capacity of a small- to medium-size power plant.

Customer Engagement is Key to Program Success

A 2007 pilot confirmed the viability of the program and enrolled 1,000 customers. The pilot was a success operationally and in customer satisfaction. Study of load impacts showed an approximate 18 percent reduction in energy use during peak hours resulting from smart features. Ninety-seven percent of participants said they would participate in a future program.

Since the pilot, BGE has reached a high proportion of eligible customers to participate. Through online and print advertisements, a website about program benefits ( and a growing list of customer testimonials, BGE has grown the number of customers enrolled in the program to more than 325,000. The PeakRewards website has been vital in engaging customers and recruiting participants. It offers a one-stop shop for learning about and enrolling in the program. It also includes customer testimonials and a map of the BGE service territory with the number of participants enrolled in each county.

Linking Operational Technology With IT to Measure Results

After the success of the PeakRewards pilot, BGE initiated another pilot called Smart Energy Pricing. It offers customers an alternative pricing structure to give them rebate opportunities for reducing their electricity demand when given a day-ahead price signal.

Certain customers received enabling technologies to help them save electricity, which included upgraded supporting technology (e.g., smart thermostats, load control switches, etc.). This linkage was required to communicate the data to other supporting solutions, such as BGE’s customer billing system, and to accurately measure the daily active load management (ALM) impacts for systemwide or local area load reductions.

To do this, BGE implemented software from Ventyx, an ABB company. The software, Retail Operations, in a single system provides capabilities for utility data management, customer contract management, revenue and load forecasting, load profiling and aggregation and distributed energy resource management. By integrating this data modeling and analytical software with its customer information system, BGE can manage DR program activities more easily, including:

  • Calculation of hourly DR reductions,
  • Calculation of hourly DR overrides,
  • Detailed and summary reporting of DR events by time period,
  • Seven-day-ahead forecasting of DR availability,
  • Support of substation feeder-specific ALM events, enabling quantification of the locational reliability and economic impact benefits, and
  • Calculations in daily backcasts and settlement with the PJM market.

The integration of analytics capabilities to both the operational technology (e.g., monitoring and control systems, including Cooper HVAC switches) and the customer billing system gives BGE valuable information and forecasts daily and monthly. As a result, BGE can efficiently and accurately provide the information required by its regional transmission organization (RTO), PJM Interconnection, to remain in compliance with market regulations.

Each day BGE’s customer information system communicates to Retail Operations which customers have switched to which retail suppliers. BGE then uses the software to forecast and backcast the energy consumption for the customers enrolled with each supplier and for the standard offer service suppliers. The standard offer service load (customers who have not chosen to enroll with suppliers) is supplied through a series of auctions and requests for proposals. The software calculates the peak load contribution values for each service location, and this value determines the generation and transmission capacity requirements for the suppliers.

Each month, the software profiles and aggregates the noninterval meter data to hourly values and performs reconciliation between the scheduled and metered volumes. This value is communicated to PJM for financial settlements with the suppliers. By ensuring accurate settlements, BGE remains financially whole in its role as the provider of last resort (POLR). The operation of an efficient POLR market ensures that BGE has a diverse, competitive and reliable field of third-party suppliers from which to choose.

The Rewards Continue

As PeakRewards continues to roll out and further integrates the data modeling and analytical capabilities of the new software, many other benefits are expected, including:

Decreased costs through wholesale price mitigation, as well as capacity and energy revenue. By supporting the accounting of DR when offered to the market during tight supply and high market prices, the software facilitates the valuation of reduced demand that can lead to reduced wholesale prices by increasing supply or backing down demand to avoid higher-cost generation. BGE also has settlements capabilities that allow it to participate in the capacity and energy markets (reliability pricing model).

Increased electric system reliability with ability to meet future load growth. The success of the program enables DR to be used in providing reserves and for contributing to capacity margins to meet load reliably.

Reduced capital expenditures for new distribution infrastructure. BGE can aggregate the load and available DR at the distribution model and accurately identify where it can be used to avoid costly capital expenditures in the distribution system.

Environmental benefits. By minimizing the generation cycles required to meet demand, BGE can reduce its emissions while maintaining customer satisfaction.

Specifically, the PeakRewards initiative is allowing BGE to reduce or defer the need for new transmission and generation capacity, which will help customers save on power bills. Empowered by new technology and aggressive customer-engagement activities, the BGE Smart Energy Savers Program also will help BGE reach its major goal of energy savings.

Most important, all of this has been and will be achieved while improving customer satisfaction. PeakRewards participants have been very satisfied with the program, as customer testimonials can attest.

Because of these benefits and broad customer acceptance, the PeakRewards program should help keep BGE at the forefront of successful demand-side management initiatives for years. And with its smart grid program in the field, BGE plans to offer customers new ways to save energy and money.


Cheryl Hindes is the director of load analysis and settlement with BGE, where she directs gas and electric class load research, profiling and load settlement processes. For the past four summers Hindes has led BGE’s Smart Energy Pricing dynamic pilot. She is chairwoman of AEIC Load Research Committee. Reach her at

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