April 21, 2025
Save Money, Help Your Community, and Make Positive Choices for the Environment
We asked our energy expert, Karin Nordstrom, OEC Energy Attorney, about the AEP Power Rewards: Smart Thermostat program, and we are sharing what you need to know about the program.
What is the program, and who is eligible to join?
To raise its rates 4.5% over 4 years, AEP agreed to offer its customers programs to help them manage their bills. One such initiative is the Power Rewards program, a demand response program available to all residential AEP customers (i.e., individuals, not businesses). And you can sign up!
What is a Demand Response Program?
A demand response program is a way to keep the lights on when the electrical grid cannot handle all the demand being placed on it. The electrical grid is like a highway and road system. Just like the highway, the electrical grid can cause traffic jams. The utility has ways to reroute traffic on its own, but sometimes the grid can get so jammed it can overload the system. That can lead to serious blackouts. A demand response program works like a traffic alert system that tells people to delay or stagger getting on the roads so that it does not have to shut down.
How does it work?
When AEP’s systems alert them that the grid could get overloaded, they will reach out to customers who signed up for the program through your smart thermostat company. This small change can release pressure on the grid and prevent traffic jams. To be a part of the program, follow these steps:
Step 1: Go to AEP’s website and follow their instructions for your situation, depending on whether you already have a smart thermostat:
- purchase a smart thermostat and get a $75 rebate, OR
- sign up your current thermostat and get a $50 digital gift card for signing up.
Step 2: Turn up or down your thermostat (based on weather) when you get alerts from AEP. Accepting this temperature change means AEP will give you $25 at the end of the year.
How do the temperature changes happen, and what does agreeing to a temperature change do?
If you agree to turn up or down your thermostat, the thermostat company will move your thermostat as much as three degrees for as long as four hours. It can be less than three degrees or shorter than four hours, but it will never be more. By accepting these temperature changes, you will save on energy costs, help your community, and decrease energy consumption.
Who controls my thermostat?
You do! AEP will ask you to help prevent blackouts, but you have complete control over whether or not you want to take action.
It’s similar to when an airline asks you to wait for the next flight in exchange for extra airline miles or a voucher. If you say no, you still get to take the flight you planned for, but you don’t get the extra incentive.
How can it save me money?
There are three ways to save money: (1) $50 for signing up, (2) $25 for agreeing to change your home’s temperature when AEP asks, and (3) using a smart thermostat can help save money by allowing you to set the device to turn up or down automatically when you are not home.
How can it help my community?
Decreasing your energy consumption during these peaks can prevent blackouts and brownouts, where entire communities can lose power for extended periods of time. These blackouts and brownouts can affect underserved communities at a higher rate due to older and less effective infrastructure. While no one has studied the infrastructure in AEP’s service territory, the OEC found that FirstEnergy’s service territory has older equipment with lower voltage levels in disadvantaged communities.
Deep Dive
I am a renter; how can I participate?
A renter who pays their electricity bill can participate in the program the same as anyone else. They will just need to take the extra step of getting their landlord’s approval to change out their existing thermostat. Also, be sure to save the original thermostat so you can reinstall it and take your smart thermostat with you to your new home.
I am a homeowner; what are the benefits to me, and how can I participate?
Follow the three steps listed above. Most thermostats are easy to install yourself without assistance from a professional. However, any electrical repair person should be able to install a thermostat for you if you would like some help.
I am a landlord or rental agency. Why should I consider updating to smart thermostats in my units?
As electricity prices continue to rise, amenities like smart thermostats can become increasingly attractive to potential customers. Offering smart thermostats is an easy and cost-effective way to provide additional benefits to your tenants.
