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Best Practice Guide |
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Local Governments |
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Demand ResponseProgramsDemand response programs are an easy way for local governments to ensure their own reliable and affordable electricity. Administered by local utilities or third-parties, these conservation programs notify participants when to use less electricity in order to prevent electricity shortages or high spot market prices. Some demand response programs provide financial incentives or other benefits to customers who agree to reduce peak consumption or shift electricity use to off-peak hours. Peak hours are those times when electricity use is at its highest, typically between noon and 7 p.m. The California Independent System Operator (ISO) triggers demand response programs when operating reserves are expected to drop below seven percent, meaning that blackouts are more likely to occur. Low operating reserves occur because of high peak demand, unplanned generation outages, transmission problems, or adverse weather. If reserves drop, California ISO will notify program administrators, who then alert program participants. There are two basic types of demand response programs: reliability and pricing. Reliability programs are triggered the day of an electrical event to prevent or offset an impending emergency. Some are voluntary programs, meaning that there is no penalty if a business is unable to reduce its load. Other reliability programs are binding and invoke penalties for non-action. However, these programs are designed so that penalties are wholly or partially offset by financial incentives, such as lower overall rates. Pricing programs, on the other hand, are tied, in theory, to the spot market price of electricity. On critical days, pricing programs invoke higher rates for electricity used during peak hours. These higher rates are only put into effect for a maximum of 12 days a year. Participants in either program type (reliability or pricing) receive advance notification when electricity conservation is needed or new rates are put into effect. This extra response time allows cities and counties to prepare building occupants and work processes, greatly reducing the cost and inconvenience of power interruptions. Participation in demand response programs also helps avoid costly involuntary interruptions. Local governments interested in demand response programs should contact their local utilities to ask for a no obligation demand response audit. Similar to an energy audit, a demand response audit examines building equipment systems and operations to determine what opportunities exist for load curtailment. Your utility representative can then help you choose among the many programs available, matching your building's profile to the best-suited incentive packages. Demand Response Tips for Office Buildings
California ISO
Resources California Demand Response Partnership. California Energy Commission, Information on Demand Response. California ISO, Information on Demand Response Programs Flex Your Power NOW! Demand Response Program. Pacific Gas and Electric, Information on Demand Response information. San Diego Gas and Electric, Information on Demand Response. Southern California Edison, Information on Demand Response Information Page. BPG Appendix 4: Demand Response Strategies (PDF download, 56 KB) |