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Respond Power Providing Cash to Customers Reducing Usage in Response to Alerts

August 2, 2011
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Respond Power has modified its dynamic rate product for customers at PPL Electric Utilities, now providing rewards for residential and commercial customers who reduce usage in response to alerts in addition to the previously offered rebates which were not tied to specific load reductions.

As previously reported, the dynamic rate product -- essentially a no-risk hourly plan -- originally provided customers with a rebate if charges based on hourly rates were lower than the bill based on the standard generation rate, with the customer not exposed to a higher, hourly-based bill if such hourly charges were higher (see 5/12).

Mark Berger, Director of Marketing for Respond Power and affiliate Major Energy, said that thousands of customers have signed up for the rebate plan since its launch in May, and that the company is "ecstatic" with the customer response.

Now, in addition to this rebate, Respond Power will provide customers with an opportunity to earn additional rewards by reducing usage in response to price alerts.

Specifically, if the customer would not receive a rebate (e.g. they pay the standard rate bill since their hourly-based bill would have been higher), or if the customer saved less than 2% through the rebate, the customer is then eligible to earn additional savings through the rewards program.

If the customer uses a lower percentage of energy during the hour of a price alert, compared to that same hour of the day on the same day of the week during the rest of the customer's billing cycle, the customer will receive a reward, less any rebates already received, at a maximum of up to 5% of the bill.

Due to competitive reasons, Berger would not discuss the rate per paid for reductions or formula used to calculate the rewards.

Currently, the rebate and rewards are paid in cash, but Berger said that Respond Power is continuing to develop other rewards for the program, such as airline miles, affinity points, etc. Berger said that such additional reward options will be a big part of the program as it moves forward.

Respond will inform customers of peak time periods via text, email, or both.

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