DR Information and FAQs for Consumers
Below is an information page on demand response. It is built in Question and Answer format and intended to help consumers better understand both demand response and how to participate in demand response programs.
Q: What is Demand Response?
A: Demand Response (DR) is customers changing their electricity usage (typically reducing use or shifting use to other times in the day) at certain times in response to economic incentives, price signals, grid emergencies, or other conditions. 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.
Q: Can I participate in a demand response program?
A: Yes, generally. DR programs exist for all types of customers, whether residential, commercial, industrial, or agricultural. You will need to check the eligibility requirements of a particular program to determine if you qualify or not.
Q: Who offers demand response programs?
A: Investor-owned utilities (IOUs), Community Choice Aggregators (CCAs), and third-party commercial entities (called “DR Providers” or “aggregators) offer DR programs in competition with each other. The IOUs (Pacific Gas & Electric Company, Southern California Edison, and San Diego Gas & Electric) offer programs that are available to all electricity customers of the IOUs or CCAs (but excluding customers of publicly-owned utilities (POUs), such as SMUD, LAWDP, etc.). CCAs offer DR programs to their respective customers. DR Providers that offer DR services and programs to customers of the above-mentioned utilities, as well as CCAs, must register with the CPUC. Currently-registered DR Providers can be found here.
Q: How do I sign up for a DR program?
Q: What happens when I participate in a DR program?
A: Generally, participating in a DR program means you have agreed to reduce or shift your electricity consumption during certain hours, called "events", in exchange for a financial incentive. Notifications of these events are given ahead of time, so you have time to prepare to reduce your electricity consumption. Each program has other important details such as the maximum length of an event, the number of events that can be called in a given time period, and eligibility requirements. Sometimes the DR program involves dynamic rates—such as, time of use (TOU) and critical peak pricing (CPP)—which encourage customers to save money by shifting their energy consumption where possible to hours during which electricity prices are lower. The specific terms and conditions of DR programs will vary, and consumers should be aware of those details when enrolling.
Q: How do I get paid when I participate in a DR program?
A: DR programs generally involve incentive payments or financial savings for customers that participate. These can come in many forms such as bill credits, rate reductions, reduced bills, or cash payments. Some programs can also involve penalties if you sign up to participate in a program that involves a commitment to reduce electricity demand by a specified amount but do not actually perform when asked. Each program’s structure is different, and you should examine the program design, requirements, and financial terms carefully prior to signing up.
Q: Can I quit a DR program after I’ve signed up?
A: Yes. All DR programs allow you to dis-enroll at some point. Minimum enrollment periods are typically one year, but this differs from program to program.
Q: Does participating in a DR program have other benefits?
A: Yes. Most DR programs are designed to help alleviate the need for future fossil fueled power plants. Thus, you could consider DR program participation as a way of doing your part to fight climate change and improve air quality. DR programs can also help prevent high electricity prices and help boost the reliability of the electricity grid.
Q: I’m curious about how current DR programs perform. Is there somewhere that I can look up that data?
A: Yes. On April 1st of every year, PG&E, SCE, and SDG&E file reports with the CPUC that highlight their DR programs’ performance the previous year as well as estimates for future program performance. These reports, called the Annual Load Impact Filing reports, are available here. Periodically, the CPUC releases reports on the performances of third-party DR Providers.