Shock Avoidance: High Bill Alert Programs and Energy Consumption

Utilities have invested billions of dollars in advanced metering infrastructure (AMI) but proceeded slowly to deploy AMI-enabled programs that benefit consumers. High bill alert (HBA) programs, which inform consumers of unusually high usage patterns, offer an avenue for tapping AMI-enabled benefits. We evaluate an HBA program and find that the program reduced mean electricity and natural gas consumption by about 0.5%. The effects were largest at the top of the usage distribution, especially when normalized by preprogram usage, indicating that households experienced fewer expenditure shocks. Estimates of the program’s benefits and costs illustrate the importance of considering the forgone value of conserved energy when evaluating demand-side management programs in the energy sector.