What is demand response

Demand Response generally refers to a reduction in end-user electricity consumption over a given time interval relative to what would have otherwise occurred in response to a price signal, other financial incentives or a reliability signal. From a grid management perspective, demand response is any technology or consumer action that controls the rate of electricity consumed rather than the rate of electricity production. The Federal Energy Regulatory Commission stresses demand response is more than just a peak load reduction tool. It makes an important distinction in its definition saying that demand response is " consumer actions that can change any part of the load profile of a utility or region, not just the period of peak usage. " Demand response represents an important load management tool that can provide a cost effective alternative to additional supply side resources to meet energy needs. Current demand response programs encompass a suite of programs administered primarily by the investor-owned utilities (Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric) that target large industrial and commercial customers that are equipped with interval meters capable of reporting energy usage in one hour increments or less. Demand response aggregators also have the ability to bundle demand response into a product that can be bid into the wholesale energy market. California utilities are rolling out smart-meters to consumer classes, including small commercial and industrial, and residential customers. Once these meters are in place, demand response programs can be developed to provide incentives for these customers to reduce load during peak periods, substantially increasing the demand response potential in the state. The demand response metrics shown here provide both a historic view of the estimated levels of demand response that was available in aggregate across the investor-owned utilities from 2009 thru 2011, as well as a projection on the level of demand response anticipated through 2020. For 2009 thru 2011, the values shown are based on utility calculations using the Public Utilities Commission-adopted demand response load impact protocols and then subsequently vetted and approved the Commission's annual resource adequacy process. The projections from 2012 onward are based on the utilities' demand response projections as filed in the Public Utilities Commission long term procurement planning proceeding and are currently under review. It is anticipated that the broad deployment of advanced metering infrastructure will enable additional demand response for 2012 and beyond. However, the amount of …