Critical Peak Rebate Programs. What Are They?

Posted on Posted in Ambit Energy, Amigo Energy, Deregulated Electricity, PUC/ERCOT, Special Promotions, Texas Electricity, Texas Electricity News, Trends

Critical Peak Rebate programs are likely to become a new hot trend in the world of Texas electricity.  So what are critical peak rebate programs, and what do they mean to you? Lets take a look.

Critical Peak Rebate programs are part of several initiatives to help Texas electricity generation stay on when temperatures are high, plants are offline, and the grid is being pushed to its maximum capacity. The most notable initiative would be the increasing of the market cap to $9000 during peak demand to try and spur new electricity plant investment. But critical peak rebate opportunities are another initiative.

Demand Response History

The basic concept of a critical peak rebate plan is actually something that has already existed in Texas for a long time…just for commercial electricity customers. Basically, when the energy was the tightest, commercial electricity customers (typically really heavy electricity users) would get rebates or discounts for shutting down and using less electricity when the grid was redlining. Recent changes by the PUC have led to the expansion of critical demand response programs to residential electricity customers, not just commercial electricity customers. Which is why you’re seeing new rebate/rewards programs hitting the marketplace.

How Do The Plans Work?

Each company will have a different spin on their own critical peak response programs. Amigo Energy is offering a rewards program where customers can earn points and then have it credited to their account, and they are promoting it with a $3000 contest for whoever accrues the most points. Ambit Energy is simply crediting all of their customers for every kWh saved during a called demand response event. So each REP can reward their customers in different ways as they see fit, which should be interesting for customers shopping the marketplace by creating plenty of unique options from which to choose. But the main premise that will be universal across providers is that whenever there is a critical event (a time in which ERCOT says the grid is being pushed to it’s maximum limits), customers will receive credits (or reward points, or whatever) for the amount in which they reduce their electricity usage. How that reduced usage is measured will also likely be different per REP, but the premise will be the same for everyone.

Final Thoughts

Expanding the critical demand response to residential electricity customers is a win/win for Texas customers, as well as for the well-being of the electricity grid. It will allow customers to get some rewards and discounts on their bills, and it will help the grid prevent rolling blackouts when we need our heat or A/C the most. And it could create a ton of creative and unique plans from which customers can shop to determine their electricity provider. Personally, I look forward to seeing what other plans different electricity companies roll out to customers in the coming months.

2 thoughts on “Critical Peak Rebate Programs. What Are They?

  1. Interesting information. How do these REP’s measure reduction in usage? Is it based on your address’ historical usage? Who controls this? Do you simply turn down your thermostat?

    1. Suzanne,

      It will be based on the existing programs that have been in place for Commercial Electricity customers for years now, such as large manufacturing warehouses, etc. For starters, all REP’s will likely only be offering the programs to people with Smart Meters, where the exact change of usage can be monitored precisely. It will be done in conjunction with ERCOT and the electricity companies, but I believe ERCOT does the heavy lifting. And yes, the measure would be from the time the alert came on, to when it ends, and the change in usage. So turn up your thermostat to a higher temperature (or lower in the winter), unplug some appliances, don’t run a washer or dryer, etc., and the difference in usage change should result in a rebate.

      The amount of the rebate and the terms of the plan will different from provider to provider, however.

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