On July 21, 2008, a group of selected residential electricity consumers in Washington, D.C., began testing advanced metering technology coupled with pricing options that could assist them in curbing their monthly bills by better controlling their power consumption. Utility company Pepco’s pilot program, known as PowerCentsDC, is the first in the electric utility industry to test the response of residential customers to three different innovative pricing options under one program.

Each of these pricing options will enable participants to save on their bills by reducing electricity usage during designated hours when wholesale electricity prices are high. Participants will be notified of forthcoming high prices on the previous day.

“In this time of rising energy prices, we hope to demonstrate through PowerCentsDC that providing customers with additional information could help them reduce electricity usage and potentially lower their bills,” said Mike Sullivan, senior vice president of operations at Pepco Holdings Inc., the corporate parent of the Pepco utility. “We anticipate that implementing this technology widely will help control the regional electricity prices during peak-demand periods.”

The district’s utility regulators approved the program that was filed by Pepco on behalf of Smart Meter Pilot Program Inc., a nonprofit company composed of Pepco, the Office of the People’s Counsel, the Consumer Utility Board, the International Brotherhood of Electrical Workers Local 1900 and the Public Service Commission.

The project will be independently evaluated, and the findings will be shared with policymakers for use in future decision-making regarding innovative electricity pricing and demand response in the District of Columbia.

The two-year pilot project includes about 1,200 randomly selected residents, representing all eight city wards.

“We must ensure that tangible benefits extend to all consumers. We want to learn how consumers react to pricing information and whether they alter their usage habits,” said Elizabeth A. Noel, D.C. People’s Counsel.

Participants received a free smart meter installation for their residence, which measures the customer’s electricity use at hourly intervals and transmits usage data to Pepco each day through a wireless communications network. Each month, participants will be sent a detailed electric usage report along with their bills.

About a quarter of the participants also received a smart thermostat that will reduce central air conditioner compressor use in response to a radio signal during high priced periods. The thermostat will provide customer messages, such as real-time electricity price signals and a daily running total of the customer’s bill.