Dynamic pricing: It works in D.C.

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Results from a smart metering pilot project in Washington, D.C. showed that residential customers there responded to dynamic pricing and saved money by cutting their consumption. The pilot worked so well that Pepco, the electric utility that serves D.C. and surrounding areas, plans to install smart meters and other smart grid technologies throughout its District of Columbia service territory before the end of 2011. The PowerCentsDC pilot was sponsored by the non-profit Smart Meter Pilot Program (SMPP), which includes Pepco, the D.C. Office of the People's Counsel, the D.C. Consumer Utility Board, the International Brotherhood of Electrical Workers and the D.C. Public Service Commission. Customers reaction was strongest to "critical peak pricing," which hiked electricity rates to five times over normal for about 60 hours during the year. Rates reflected slight discounts during the rest of the year.

Quick Take: This pilot is said to be the first to test smart meters with three distinct pricing menus, and its positive results are similar to results from other pricing pilots.

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