DEFG Releases Survey Results on Integrated Demand Offering (IDO) of the Future

Ease of Use and Lower Costs are Top Benefits Cited by Survey Respondents

Washington, DC … DEFG, a management consulting firm focused on energy and the environment, today released survey results on the integrated demand offering of the future. More than 400 industry professionals took the survey from April 21st to May 5th.

“Changes to pricing, including the tariff structure, will be critical to the success of the IDO in the future.”

Tom Brunetto, Managing Partner, DEFG

An Integrated Demand Offering (IDO) provides a combination of energy efficiency (EE), demand response (DR) and distributed energy (DE) options that best meet customers’ needs and improve the customer experience.

“There is widespread agreement that an integrated offering – bringing together energy efficiency, better pricing, demand response, and distributed renewable energy – is coming and will be important,” stated Jamie Wimberly, CEO of DEFG LLC.  “Consumers will be seeking easy-to-use, cleaner, low-cost alternatives to manage higher electricity prices.”

Other findings from the survey include:

• Survey participants expect electricity prices to rise, and they believe that better integrated demand offerings can be designed to help consumer reduce bills by a similar percent
• Moderate change is expected in the industry, but there are different views regarding the expected pace of change, with many forecasting change at a “moderate pace” and others at a “rapid pace”
• “Energy costs,” “climate change,” and “regulation” are seen as important drivers of change related to energy efficiency, demand response and distributed energy
• “Ease of use” was identified as the top benefit or characteristic of an integrated demand offering from a list of nine, and it reappeared in an open-ended response along with “convenient,” “simple,” and “cost savings”
• Survey respondents expect the integrated demand offering to reduce household consumption
• Peak pricing signals are very important if the purpose of the integrated offering is to reduce energy usage; conversely, if an alert is provided without a financial incentive, it is anticipated that the savings will be smaller
• Consumers are open to service delivery by any of the following: ESCO/ specialized service provider, utility, competitive retailer or public-private entity/ not-for-profit agency
• An overwhelming percent of respondents agree that integrated demand offering services should not be delivered by government
• In order to be successful, service providers must develop viable business models and focus on the consumer benefits
• In order to support integrated demand offerings, the policy focus must be on regulatory incentives to utilities and the deployment of advanced meters
• At first, utilities are expected to benefit relatively more than consumers from operational efficiencies and other benefits derived from the IDO on the utility side of the meter.
• Moderate change is expected in the industry, but there are different views regarding the expected pace of change
• “Energy costs,” “climate change,” and “regulation” are seen as important drivers of change

DEFG LLC has recently conducted a workshop with utilities on the development of integrated demand offerings.  “Changes to pricing, including the tariff structure, will be critical to the success of the IDO in the future,” stated Tom Brunetto, DEFG Managing Partner. “Pricing is the glue.” Mr. Brunetto stated that the survey findings confirm the direction of his work with energy utilities.

For more information on DEFG LLC or the integrated demand offering, please visit our website: www.defgllc.com.