What is Demand Response?

By Yoav Lurie on June 18, 2015

AKA Peak Events or Peak Hours — Learn what it means for you, the grid, and your electric bill

peakeventdays1Hotter temps outside mean many of us will be turning to air conditioning and other devices to stay cool inside this summer. All this electric-powered cooling puts a lot of strain on the electric grid, and can be a recipe for service interruptions, which is why many utilities plan to beat the heat this summer with Demand Response programs that encourage customers to conserve energy during high-demand times on designated days.

As a utility customer, it’s important to know what Demand Response means for you – and your electric bill – so you can be ready to act, save and even win this summer.

In Demand Response programs, utilities use rate increases, bill credits or other incentives to control demand on the electric grid during periods when electricity demand is threatens to outpace the electricity supply. When a utility anticipates these conditions – typically due to extreme temperatures, but also in situations of power line damage or scheduled maintenance – it will be called a Demand Response event.

Sometimes called “Conservation Events”, “Peak Events” or “Peak Hours,” Demand Response Events are specifically-designated hours during which customers are asked, in advance, to be mindful of their energy consumption. National Grid, for example, uses our engagement platform to send alerts via text, email, and/or voicemail messages to give their customers a heads up the day before, and the morning of, a Peak Event. This is a highly effective strategy that yields increased customer energy usage awareness, load reduction and engagement with the utility.

Demand Response programs often include rewards or penalties to encourage behavior change. Customers who save energy during an event may receive monetary credit on their next bill, or may simply avoid getting dinged by rate increases that utilities may employ during a Demand Response event. Some utility companies charge up to 7x the typical rate during an event!

Utilities are helping customers automatically adjust their energy consumption during Demand Response events through the use of demand response or load control switches. Many customers are also signing up for smart thermostat programs that let the utility take control of their wi-fi-controlled thermostats.

If you don’t have a smart thermostat or demand response switch, you can keep utility bills low during high-demand periods by shifting energy-intensive activities to off-peak hours and following tips like these:

  • Wash and dry clothes in the evenings, or better yet, on weekends
  • Set your dishwasher to run overnight if it has a timer, or turn it on right before bed
  • Pre-cool your home and then turn off your AC during a peak event

 

How you react to Demand Response events can significantly impact how much you pay for electricity over the course of the year and influence your utility company’s service stability and and service all the customers in your community.

So, take action to save energy this summer, especially during those afternoon hours on hot days. Summer will be that much sweeter knowing you’re doing your part to to ensure there is enough electricity to go around for everyone. The extra savings on your bill won’t hurt, either.