Demand Response was created as an alternative to the utility/grid operator investing in additional generation to meet the demand placed on the grid during peak times. The program allows customers to receive an incentive for curtailing use and demand (kilowatts) on the electric power grid. The incentive payment through this program is roughly based on what the grid operator pays generators for capacity.
Who are the best candidates to participate in Demand Response?
You may be a candidate for Demand Response if one or more of the following apply to your operations:
- Monthly peak demand of 200 KW or more
- Ability to alter facility/equipment usage when called upon with one-hour notice
Note: Typically, a one-day notice that such a reduction is possible
Some high electric users that may otherwise qualify have critical operations that cannot be curtailed. If you think you may be able to curtail a significant amount of usage (approximately ≥100KW), you may want to learn more about the specifics of the program.
How do Demand Response participants curtail?
There are many ways to curtail your usage. Below are a few examples of how our customers have reduced their demand during an event.
- Turning off or raising temperature on air conditioning
- Shutting down manufacturing equipment
- Adjusting operations (shift management)
Typically, Demand Response vendors, also known as Curtailment Service Providers (CSPs), will conduct an analysis of your operations and energy use to determine the most practical and impactful ways for your business to curtail.
Why do we recommend running a competitive bid process to select a CSP?
Once you have determined that Demand Response may work for your company, it is critical to maximize your curtailment amount as well as your payment through the program. Vendors or CSPs run the program by keeping a portion of the payment you earn. To maximize your portion of what is earned, CEA recommends running a competitive bid for CSP services to earn the right to be your program vendor. This process will help you avoid common pitfalls in selecting a CSP, such as:
- Bidding in less than you can actually curtail
- Relying on inadequate monitoring tools to maximize performance during the event
- Agreeing to receive a smaller percentage of the payment
Our competitive RFP process will identify the right vendor for you—maximizing the amount you are eligible to earn and the portion of the payment you will retain.