A few days after Christmas, the Nest thermostat company sent an email to its Austin Energy customers.
The subject line was: “Austin Energy customer? You could save $85 this summer.”
It’s true. You can. The money is a one-time incentive designed to encourage people to sign up for a program that Nest calls “Rush Hour Rewards.” This program allows Austin Energy to manipulate a customer’s Internet-connected Nest thermostat during peak demand times, which are typically summer afternoons, and raise the temperature settings a few degrees for several hours.
Known in the utility industry as “demand response,” it has become an important way to reduce overall power generation costs, and it helps lower the possibility of blackouts or heavy use of Austin Energy’s power plants.
Smart thermostats are an increasingly popular purchase for home and business owners. According to data from Parks Associates, smart thermostats account for more than 40 percent of the nearly 10 million thermostats sold in the United States this year.
The Nest partnership in Austin has actually been going on for more than two years, said Scott Jarman, a consulting engineer with Austin Energy, and so far 9,000 customer accounts have signed up. Austin Energy offers the same deal to customers with other brands of smart thermostats, such as Ecobee and EnergyHub, which operate in a similar manner. Overall, there are 10,000 customer accounts that have signed up for the utility’s “Power Partner” program.
Jarman said the agreement allows the temperature to be raised at most up to 4 degrees, and these temperature resettings will only occur during summer weekday afternoons, generally between 4 p.m. and 6 p.m. Customers are also allowed to override these settings if they become uncomfortable, he said.
“What we’re finding statistically is over 80 percent of the participants stay (with the settings) through the entire event,” Jarman said.
Last year, Austin Energy activated its “demand response” program 15 times, Jarman said. The total annual budget for this program is $700,000.
Austinite Eduardo Longoria joined the Power Partner program through his Ecobee thermostats, which he has installed in his home and in a school and community center he runs. “It has never bothered me when they turn” the thermostat up, Longoria said. “Sometimes I feel like it’s a little stuffy and hot,” he said, and when he looks at the thermostat, he can tell it’s been adjusted during those peak demand times.
Longoria is a big fan of the program, in part, he said, because he’s eligible for an $85 rebate for every smart thermostat he buys. He’s bought 15 Ecobees total, he said.
Smart thermostats are popular because they essentially program themselves by learning the user’s setting preferences. Just by turning the thermostat settings up or down a smart thermostat user is “programming” the device, and it knows when you are away and automatically adjusts settings to save on heating and cooling costs. A Nest executive in 2014 said that 20 to 30 percent of a home’s energy bill is for heating and cooling empty houses.
Nest and similar smart thermostats can also be connected to the Internet and accessed through smartphones, so a home or business owner can also adjust settings from afar.
Prior to partnering with smart thermostat companies, Austin Energy had a different way of encouraging customers to use less energy in the hot summer months. Between 2001 and 2013, Austin Energy would install special thermostats whose settings could be changed during peak demand times using radio signals. The utility installed about 90,000 of these thermostats over this period, though it’s not known how many are currently in operation.
By the numbers
$85: Rebate available from Austin Energy for smart thermostat customers who sign up for “Rush Hour Rewards.”
10,000: Austin Energy accounts that have signed up for the program so far.
4: Total degrees the thermostat may be raised by utility during peak summer hours.
15: Instances in 2015 that Austin Energy adjusted thermostats in the program.
Source: Austin Energy