A select group of members of Southern Maryland Electric Cooperative (SMECO) will start getting word from their co-op soon gently suggesting that it may be time to make some adjustments around the house.

“Thank you for taking part in SMECO’s Smart Thermostat Pilot,” begins the correspondence (letter, email, or text) from the Hughesville-based co-op. “We hope you are enjoying your ecobee3 thermostat. As part of the pilot, SMECO has been analyzing thermostat data to help you identify areas that could be causing high energy consumption.”

Some of those homeowners will be informed that their heating, ventilation, and air-conditioning equipment (HVAC) might require attention: “We have found that your home may need an HVAC tune-up. Poorly operating HVAC systems can lead to high energy bills, trouble maintaining desired heating and cooling temperatures, [and] humidity issues. SMECO’s Heating and Cooling Rebate Program offers customer-members many incentives. Learn more at SMECO.coop/hvac or find a participating contractor to get started today.”

Others will receive a simple reminder to close the curtains: “We have found that your home may be losing energy through uncovered windows. Window treatments or coverings can reduce heat loss in the winter and heat gain in the summer. While you probably don’t need to replace your windows, you may benefit from inexpensive energy-efficient window treatments. You can learn more from the Department of Energy website.”

And a lucky few will get: “Congratulations! It appears that your HVAC system is operating efficiently. Did you know that SMECO offers a number of other energy efficiency programs to help customers reduce overall consumption and save money? Visit SMECO.coop/save to find more opportunities to save.”

None of the homeowners receiving these messages will have had to arrange a visit from a SMECO energy adviser. They won’t have had to take a day off work and wait for someone from the co-op to come by and spend three or four hours climbing into the attic or poking around crawl spaces.

All that these 600 or so members, out of SMECO’s nearly 160,000 accounts, had to do was sign up for the co-op’s smart thermostat pilot program. The new connected thermostat does the rest, giving these homeowners the ability to set target home temperatures and control them from their smartphones, tablets, or other mobile devices.

The thermostat uses a home Wi-Fi connection to report energy use via the cloud and the internet to both the consumer and the co-op. It tracks how long it takes to heat or cool the home to the desired temperature and how long the home holds at that level before the HVAC system kicks in again. And by slicing and dicing the data back at the co-op, SMECO can determine with fair accuracy what may be forcing the system to run more than it should.

“What we’re hoping to do is to use all of the information the thermostat’s sending back to us to do what we’re calling our virtual audit,” says Jeff Shaw, the co-op’s vice president of distributed energy resources & sustainability. “We’re just letting members know what we have observed, and then we can take it down the road as far as they want to go.”

Empower Maryland

The smart thermostat pilot program, he says, is part of SMECO’s response to what state policy-makers call EmPOWER Maryland, a legislative and regulatory package mandating significant reductions in per-capita energy use. Thanks to a progressive board and management, Shaw adds, the co-op was ready to approach the new requirements as an opportunity rather than a burden.

“SMECO’s always done energy efficiency programs, even without legislative mandates,” he says. “Would we be doing smart thermostats without EmPOWER Maryland? I would say—probably. We’re always looking to see what’s out there on the horizon.”

Plenty of possibilities await co-ops and their consumers on that horizon, according to The Swiss Army Knife of Future Utility Programs, a white paper on smart thermostats from ICF, a worldwide technology services provider and consulting firm that contracted to run the rollout at SMECO.

“While savings from thermostats is influenced by how occupants set the temperature, connectivity and various algorithms (e.g., that take into account occupancy, weather, etc.) can help thermostats automate savings,” the report states. “Studies have found that these ‘smart’ thermostats can save between 8 percent and 22 percent for heating and 13 percent to 23 percent for cooling.”

Efficiency performance and member satisfaction, the report adds, makes the smart thermostat a potent utility tool.

“Beyond energy savings that can be claimed when installing the device, smart thermostats provide a versatile out-of-the-box platform for demand response, revenue generation, grid optimization, and customer engagement. This puts utilities in a great position to adopt this technology as part of energy- and cost-saving programs for their customers.”

House Calls

The potential for savings on both sides of the meter starts with the ability to do those “virtual audits” that trigger SMECO’s messages to its pilot program participants, according to Justin Mackovyak, ICF’s manager of demand-side management programs and the lead author of the Swiss Army Knife report.

Heating and cooling can account for 40 percent or more of a dwelling’s energy use, Mackovyak notes, making it the first target for utility energy auditors during a house call.

“We’ve been doing that for decades,” he says. “It’s very good, but it’s very expensive. Somebody has to go out to the house and inspect the home, check the windows and the attic insulation, do the blower door test, and then analyze the audit and figure out what the customer’s next steps should be.

“The beauty of the smart thermostat is that we can do the audit remotely. We’ve eliminated the separate trip out, the customer having to take a day off work, the risk of someone falling through the ceiling—it’s always something. And then we can follow up directly with that customer.”

Shaw, SMECO’s vice president, says ICF handled and continues to handle a lot of the thermostat project for the co-op. The company helped design the program, including selecting the right members to participate, and came up with the specifications for the thermostat to be used. Three manufacturers met those specs and were tested in the various aspects of the pilot. For the virtual audits, SMECO chose Toronto-based ecobee.

“One of the main reasons we went with ecobee is because of its messaging capabilities,” he says. “You’re able to remotely control your set points on your mobile apps and phones. And it also has a very sleek, unique design.”
The co-op’s choice, the ecobee3, retails for a daunting $200 or so, which Shaw concedes can put a damper on consumer participation. But the co-op is looking into rebate programs that could cut the price in half, and the thermostat is relatively simple to install. “I’m no techie,” Shaw says, “and I can do it.”

'You Can't Please Everybody'

When SMECO announced the smart thermostat pilot, 2,350 members applied. In the end, 599 homeowners qualified and had the new models installed in their houses. The vast majority, Shaw says, took advantage of the unit’s capabilities and were pleased with its performance.

Mackovyak says utilities have to tailor their approaches to efficiency programs, whether they’re rolling out smart thermostats or promoting more efficient light bulbs.

“You can’t please everybody all the time,” he says. “The responsibility of the utility is to provide options for every person in their membership. Certain people didn’t like CFLs when they came out, but we didn’t force them to transition; we offered other things that fit their personal appetite.”

SMECO may have had an advantage in peddling smart thermostats simply because of its service territory, Shaw says. “Because we serve in the suburbs of Washington, D.C., we have much different demographics.” Even so, the project ran into some unexpected glitches.

“We do need strong, reliable Wi-Fi service,” he says. “Early on in the program, one of the first things we were looking at was the connectivity. If we had problems, we would work with them. There weren’t many, but there were one or two where we had to pull the thermostat out because it wouldn’t talk to us.

“And we found out that a lot of people turned off their Wi-Fi when they went to bed or when they went to work,” he says. “This was a lot of people’s first foray into the internet of things, so I get it.”

Some members also may be a bit uncomfortable with what Mackovyak calls the “big brother” aspect of their utility keeping track of how warm or cool their homes are, and Shaw says SMECO has been taking that into account as it wordsmiths the “virtual audit” letters to participating members.

“That first touch point is critical,” he says. “That’s got to be crafted very carefully, even though they’re in this pilot and they’ve agreed to this. But we wanted to take it a little further than just giving them a rebate and handing them a new thermostat. It’s like we gave them a Mercedes; now we want to teach them how to drive it.”

Giving consumers the steering wheel, after all, is the whole point. “It’s not just us controlling things,” Shaw says.

“It’s the customer who has the control. We can’t just send them a pricing signal when there’s no way for them to correct what they’re doing to save energy.”

Smart thermostats are just a first step in that direction. Smart, interconnected homes will help consumers and their co-ops save even more, Mackovyak predicts.

“People can say, ‘Yes, SMECO, I’m a connected person.’ They can say, ‘Yes, SMECO, optimize my home for me, so that my life is not disrupted but my house is automatically saving energy when I’m not home.’”

Shaw hopes to see the 600 pilot participants turn into thousands more, with the added benefit of control over other home loads. But shaving demand from heating and cooling is a good way to start.

“We start with the smart thermostat, and the next step is the smart home,” he says. “At the very end of the day, we want high customer satisfaction, and we want them to think of us as their trusted energy adviser. Because we’re helping them reduce their energy use.”