Demand Response

Demand Response (DR) refers to systems and technology used by utilities to manage and encourage consumer reductions on the demand for electricity during peak usage times by employing "real-time" pricing market conditions in place of current fixed-cost pricing. Demand Response proponents believe that if consumers were to face the actual price of electricity in peak demand periods, they would naturally decrease their usage in reaction to price points.

When implemented, a Demand Response system allows utility customers, armed with dedicated control systems, to decrease electricity loads upon a request by the utility company or in response to market price conditions. Upon activation, controls would reduce services (lights, machines, air conditioning, etc.) according to preplanned load schemes.

ISO New England is a regional transmission organization (RTO), serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. ISO New England is an independent, not-for-profit corporation and it is carrying out one of the most progressive electric utilities programs in the nation.

For example, its Demand Response for business program compensates customers for reducing consumption during unstable or volatile market conditions. The three tiered approach used by ISO New England is flexible enough to allow any company to easily control their electricity use and take advantage of savings.

ISO New England offers customers a choice of various economic and reliability-based programs, including:

• Real-Time Demand-Response Program: Compensates participating customers for reducing electricity use during system emergencies within either thirty minutes or two hours of the ISO's request.
  
• Real-Time Price Response Program: Compensates participating customers for voluntarily reducing their electricity use when wholesale prices are forecasted to exceed ten cents per kilowatt/hour.
  
• Day-Ahead Option, launched on June 1, 2005 and supplements the Real-Time Demand Response and Real-Time Price Response programs: Participants from either of these programs have the option of offering electricity reduction "bids" that are cleared based on the day-ahead wholesale energy market (a day in advance of the actual operating day). This program allows customers to establish their own price point for electricity usage.

Some of the leading organizations working on Demand Response solutions include:

http://www.dramcoalition.org/ — The Demand Response and Advanced Metering Coalition is a non-profit organization based in Washington, DC that includes the leading providers of technologies and services in the area of Demand Response and its enabling technologies such as advanced metering. Its mission is to be a source of information, data and expertise in Demand Response and to provide a diverse forum for ideas and experience to be exchanged among policy makers, DR practitioners, DR providers and other interested parties.

http://www.pge.com/demandresponse/ — PG&E's Demand Response programs offer incentives for business owners who curtail their facility's energy use during times of peak demand.

For PG&E customers one of the easiest and most convenient ways to participate in a demand-response program is through the SmartAC program. Over 61,000 PG&E customers have already signed up and installed the free SmartAC device that reduces the energy used by air conditioner units—automatically—in case of a state or local energy supply emergency.

http://www.demandresponsecommittee.org/ — The United States Demand Response Coordinating Committee (DRCC) is a non-profit organization formed in 2004 to increase the knowledge base in the U.S. on Demand Response and facilitate the exchange of information and expertise among Demand Response practitioners and policy makers. DRCC members include Ameren, American Electric Power, Commonwealth Edison, DTE Energy, ISO-New England, MeterSmart, MidAmerican Energy, Midwest ISO, National Grid, NYSERDA, Pacific Gas & Electric, PJM Interconnection, PPL Electric Utilities, Progress Energy, Salt River Project, San Diego Gas & Electric, Southern California Edison, Southern Company, Southwest Power Pool, Tennessee Valley Authority, Wal-Mart Stores, Inc. and Xcel Energy.

http://drrc.lbl.gov/drrc.html (DRCC) — The California Energy Commission's Public Interest Energy Research (PIER) program is launching a Demand Response Research Center (or "Center") led by Lawrence Berkeley National Laboratory.

http://gridwise.pnl.gov/ — GridWise is a vision for future electric technologies where information technology revolutionizes the electric system. The goal is to bring the electric system into the information age and use real-time information, distributed e-business systems, and market efficiencies to minimize the need for inventory and infrastructure, and to maximize productivity, efficiency, and reliability.

With the help of information technology, a distributed, yet integrated energy system would empower consumers to actively participate in energy markets—the key to stabilizing spiraling prices.

Demand Response is a win/win for both utility producers and consumers. By informing consumers of the real cost of electricity usage during peak periods and having a plan in place to automatically reduce consumption during critical energy cycles, consumers take an active hand in keeping the cost of electricity in check and reducing the load on the grid.