Dollars for Decreases: Enroll in a Demand Response Program Today


Our energy grid is highly reliable, however there are times when it experiences significant stress, like that hot day when everyone is blasting the AC. The significant peak in usage generally has one of two undesirable results.  Power companies could be forced to fire up older, less efficient generation plants, which is expensive (read: undesirable). If they cannot/will not manage this in time, the general public experiences a good old fashioned ice-cream-melting brown out (read: still undesirable). Customers and companies can prevent these costs by trading; if customers reduce their electric usage, power companies can avoid an enormous hit to their bottom line. In order to incentivize this bargain, power companies have created the Demand Response (DR) Program, in which they pay YOU to reduce your consumption.

Wait – I could get paid to not use energy?
Yes, provided you meet certain requirements. Commercial, industrial, and institutional customers are in the best position to take advantage of Demand Response programs because they typically have the ability to reduce their energy use by 100 kW, the minimum required amount. They are also most likely to have building automation systems that simplify participation by implementing pre-determined energy-saving procedures with one button. In fact, this type of program is built into the law. In Pennsylvania, electric utility companies like Duquesne Light and FirstEnergy are required by Act 129 to work with their customers to reduce energy demand and consumption.

How will I know when to participate?
The first step is contracting with a vendor who provides Demand Response services. Each contract will vary slightly. As an example, let’s take a look at the requirements for Duquesne Light’s Demand Response program administered by Enerlogics.

To participate you must be a Duquesne Light customer and sign a contract. The program is four years long, and you can participate for one, two, three, or all four years. The performance period falls during the warmer months of each year, from June 1 through September 30.

When a DR event is called, you’ll receive advance notification by noon on the weekday before the event. You’ll also receive a reminder by 9 AM on the day of the event. The notification will list the start and end times for the event and will be sent out by email, text message, or phone call. Multiple people can be listed as contacts so that the message is received by all appropriate staff.

Each event is only 4 hours long and no more than 6 events will take place each year. If no event is called during the performance period, a test will be scheduled in late September.

During an event, you’ll be asked to reduce your energy use by a minimum of 100 kW. Your usage will be measured hourly to calculate just how much energy you avoided compared to a baseline of your recent use.

I have to keep my facility running! How can I save energy?
You’ll definitely take into account the needs of your organization to ensure business continuity. The good news is that with some thoughtful consideration before an event, you can achieve your reduction goals without significantly impacting your operations. Your DR program representative can work with you to identify opportunities for savings.

Options to reduce energy use could include:

  • Turning off non-essential lighting, signage and decorative features, including fountains and audio/video displays.
  • Pre-cooling work spaces in the morning, before the DR event takes place.
  • Adjusting thermostats by a few degrees – most occupants will understand that it’s a little warmer inside when it’s a very hot day outside, particularly when it’s only for a few hours.
  • Rescheduling tasks like battery charging, housekeeping, or production activities to take place before or after the DR event.
  • Switching to battery use or on-site generation if possible.

Okay, sounds good! Can you go back to the “getting paid” part?
Payment terms will be outlined on your contact and will vary, but in general you will be paid for both your enrollment and on a per-event basis. More frequent participation? More money.

You can also boost your paycheck by maximizing your reduction. In general, a building participating at the 100 kW minimum is likely to receive a total incentive of around $2,000, while buildings shedding 1+ megawatts of load could expect to see 5-figures (again, your contract may vary). Payments are made at the end of the annual performance period in the form of a check, so you’ll want to be sitting down when you open the mail.

As you go through the Demand Response program you’re likely to learn a few things along the way. You can use this information to make plans for permanent energy reductions, allowing you to save money on your electric bill every single month, even when it isn’t a peak time. Consider creating a revolving fund where payments for participation in a DR event are used to fund energy efficiency upgrades – allowing you to invest in lighting retrofits, renewable energy installations, HVAC upgrades, and battery storage. As these programs pay back over time, your revolving fund will grow and allow you to take advantage of even larger opportunities. Getting dollars for your energy decreases could have a big payoff!

Who to contact:

  1. For Duquesne Light customers: Contact Enerlogics
  2. For Penn Power customers: Find your DR Program here.
  3. For West Penn Power customers: Find your DR Program here.
  4. BONUS ROUND: PJM Interconnection (a regional transmission company) also offers a DR program. You can enroll with both your utility company and with PJM.
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