Demand Response (DR)

Demand response (DR) is a way for customers to help California manage its electricity demand. In Decision (D.)17-12-003, the Commission broadly defines demand response as reductions, increases, or shifts in electricity consumption by customers in response to their economic signals or reliability signals. Economic signals come in the form of electricity prices or financial incentives, whereas reliability signals appear as alerts when the electric grid is under stress and vulnerable to high prices. Demand response programs aim to respond to these signals and maximize ratepayer benefit.

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:

•   Avoiding the construction of new power plants and transmission infrastructure  
•   Avoiding the purchase of high-priced energy, lowering overall cost of electricity   
•   Providing greater reliability to the grid, which helps prevent blackouts  
•   Avoiding the consumption of fossil fuels which can damage the environment
•   Harnessing or integrating renewable energy by reducing afternoon curtailment or evening system ramp

Currently, demand response programs are administered by California’s three regulated investor-owned utilities (IOUs); CPUC jurisdictional entities, such as Community Choice Aggregators (CCAs); or third-party commercial entities known as 'Aggregators' or 'Demand Response Providers' (DR Providers). 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.

For more information on: 

• 2021-2022 Summer Reliability Decisions, click here.
• Emergency Load Reduction Program (ELRP), click here.
• Understanding DR from a customer/consumer perspective, click here.
• IOU DR programs, click here.
• Aggregators and DR Providers, click here.
• Aggregator and DR Provider registration with CPUC, click here.
• Demand Response Evaluation and Research, including the recent Demand Response Potential Study, click here.
• Demand Response Workshops, click here. 
• DR Cost-Effectiveness, click here.
• Load Impact Protocols, RA testing reports, QC update templates, click here.