What is Demand Response?
Demand Response is a program through which customers reduce their electricity consumption in response to either high wholesale prices or system reliability risks. Demand Response customers are paid for performance based on wholesale market prices. The ISO New England regional grid operator administers this program.
Why is Demand Response important?
- Establishes reliability, which is beneficial
- Enables rapid implementation and fast response
- Produces regional economic benefits
- Reduces spot market price spikes
- Reduces price volatility, risk, and lowers prices
- Reduces Greenhouse Gas Emissions
- Limits supplier market power
- Gives customers control
- Offers customer benefits
- Improves load shape and capacity/energy payments
- Allows 1 MW of Demand Response to be paid on an equal basis with 1 MW of Generation
ISO New England (ISO-NE) offers a variety of programs, which compensate large electricity users for reducing consumption when demand or market prices are high and system reliability is at risk. ISO-NE also provides a Service Provider Directory to research options for enrollment or technology services.
Your municipal electricity provider provides information about load management and demand response services.
The Office of Electricity Delivery and Energy Reliability is helping to develop guidelines for demand response programs across the United States, as part of its commitment to modernize the nation's electricity infrastructure.
This information is provided by the Department of Energy Resources.