Utilities demand response program

DR traditionally involved customers reducing electricity consumption temporarily in response to economic or reliability signals. More recently, DR has evolved to encourage customer to shift electricity consumption from hours of high demand relative to energy supply to hours where energy supply is plentiful relative to demand.

Future DR may involve customers increasing their electricity usage when the grid has too much electricity generation from renewable resources like the wind or sun. Effective demand response programs provide California ratepayers with various economic and environmental benefits.

These benefits include:. Residential, commercial, agricultural and industrial customers can all elect to participate at their discretion in demand response programs offered by the IOUs, CCAs, Aggregators, or DR Providers and receive financial incentives or reduce their energy bills for doing so. Such programs can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates.

Methods of engaging customers in demand response efforts include offering time-based rates such as time-of-use pricing, critical peak pricing, variable peak pricing, real time pricing, and critical peak rebates.

It also includes direct load control programs which provide the ability for power companies to cycle air conditioners and water heaters on and off during periods of peak demand in exchange for a financial incentive and lower electric bills.

On top of supporting energy reduction and stabilizing the grid, these programs are simple to participate in and consumers get paid for both participation and performance! Participation in DR events means that customers must adjust their loads manually. The benefit of enrolling in DR programs through an aggregator partner is that the entire process can be automated. Once the customer agrees to enroll in the service, programs are automated and the customer gets paid automatically for participating and performing during events.

Participation in DR events will cause disruptions to business. Typical events are only between hours and occur only a few times per year, so disruption to businesses is very minimal and offset by compensation.

An established DR partner can help set up a strategy that works for your business, for example: excluding temperature critical areas of your facility in the curtailment strategy, having different strategies for dining vs kitchen areas, or curtailing only a portion of lights.

Demand response agreements between utilities and customers are not complex. If the customer chooses to work with a partner, the customer gives permission to utilities to interact with the partner on their behalf.

Customers take on a financial risk by participating in DR programs. Many programs offered by utilities offer high rewards for participation. Some programs come with a performance expectation coupled with a financial penalty if performance goals are not met.