MCE’s Program Plug-in blog series takes a deep dive into offerings available to MCE customers and how you can plug in to energy savings, bill relief, resiliency, safety upgrades, electric vehicles, and more.

MCE’s energy efficiency portfolio offers a variety of programs that help reduce energy consumption while increasing grid resilience in our service area. On July 30, 2021, Governor Gavin Newsom made an Emergency Proclamation that directed state agencies to make additional energy resources available to serve customers during the high-power demand peak days. Peak days typically occur during heat waves, when cooling demand across the state is at its highest. These extreme heat events can lead to blackouts that leave thousands of customers without power, and put the health and safety of vulnerable residents at risk. To reduce the likelihood of these outages, MCE has been focusing on identifying ways to increase energy supply and decrease demand during the peak demand hours.

Strategies for the Marketplace Programs

One of these solutions is MCE’s suite of Marketplace programs, which accelerate the adoption of energy-efficient equipment with a focus on peak period demand reduction and energy savings. MCE’s Marketplace programs include the following strategies to promote scale, accountability, and grid reliability:

1. Smart meter data measures the amount of energy that is being saved. The data is adjusted for weather, occupancy, or other unexpected influences (for example, Public Safety Power Shutoff events) on customer demand. Traditional energy efficiency programs determine savings by using estimates and assumptions. This new meter-based methodology is more accurate and provides critical insight about when energy savings are occurring. Energy that is saved during times of peak demand has a greater impact on reducing greenhouse gas emissions and improving grid reliability while lowering customer bills and energy procurement costs.
2. An incentive structure pays premium rates during the summer peak hours, which can exceed 10 times the value of off-peak rates. Marketplace participants are rewarded for demand reduction and energy savings when it matters most. The incentives encourage long-term energy efficiency and flexible load management that can support grid reliability
3. Incitations are directed to the installation contractor or equipment provider, referred to as aggregators. Virtually any equipment that produces measurable savings can be included in the program. By removing barriers to program participation and opening the door to a wide range of technologies, the Marketplace programs ensure that results are rewarded rather than a specific technology type or single program partner.

MCE’s FLEXmarket programs are split into two major categories: the Residential and Commercial Efficiency Market Programs and the Peak FLEXmarket Program, which focuses on demand reduction via load shifting and event-driven demand response during summer peak hours (4 p.m. to 9 p.m.).

Commercial and Residential Efficiency Market Programs

MCE’s Efficiency Market Programs offer an innovative and flexible approach to energy efficiency by working directly with aggregators and project developers that offer cost-effective energy efficiency services.

These normalized metered energy consumption programs evaluate savings by using meter data. They pay a variable rate for savings to reflect the time-dependent value of energy efficiency savings. The payment rate itself is grounded in the hourly avoided cost values of those savings, as well as the expected life cycle of a project. In other words, program participants are compensated for savings at a rate that mirrors the total system costs of consuming electricity at that hour.

Aggregators are encouraged to develop their own customer offerings and solutions to maximize impacts, with a built-in incentive to focus on peak period savings in the 4 p.m. to 9 p.m. evening peak. Aggregators are also provided with maximum flexibility to determine the technical solutions and products that can best serve their customers’ needs. Nearly any energy efficiency technology is accepted.

MCE also offers aggregators co-branded marketing and support to align financing resources for a comprehensive customer experience. Customers that are enrolled in the Efficiency Market Programs can also enroll in MCE’s Peak FLEXmarket Program for event-based demand response.

Peak FLEXmarket Program

MCE’s Peak FLEXmarket Program uses the same participation and measurement and verification (M&V) framework as the Efficiency Market Programs but focuses exclusively on summer peak hours. The program provides tools to measure hourly reductions in energy use so that MCE can compensate aggregators for their impacts. Payments are made directly to participating aggregators and project developers for savings delivered during summer peak hours (4 p.m. to 9 p.m., June 1–September 30).

The Peak FLEXmarket Program also provides a premium incentive during Flex Alert events, like a traditional demand response program. These events typically occur during extreme weather events, when the electrical grid is most stressed. This incentive rate during demand response events is $2,000 per megawatt-hour.

The program welcomes nearly any strategy that reduces electricity consumption during program hours, including behavioral changes, building or equipment controls such as load scheduling, and battery storage discharge. The Peak FLEXmarket Program does not accept fossil-fuel technologies such as back-up diesel generators or natural gas-fired solutions.

MCE’s Marketplace programs help our customers access a broad array of energy efficiency and demand response technologies and services, which brings bill savings to customers, reduced carbon emissions, and improvements in grid reliability when it matters most.