Demand Response

Demand response is essential to competitive markets, providing growth, depth, and liquidity.

While wholesale electricity prices fluctuate hourly, retail customers generally do not see these price changes.  Without clear price signals, customers have no incentive to reduce usage during infrequent periods of high wholesale prices. 

Demand response - enabling load to be price-responsive - is essential to assure the efficient interaction of supply and demand.  It can relieve generation and transmission constraints, reduce the severity of wholesale price spikes, and lead to lower overall energy prices for all consumers.

Demand response must be market-based, cost-effective, and promote economically efficient pricing.  There should be no subsidies or minimum targets.  FERC's Standard Market Design provides an appropriate platform for incorporating demand response as an integral part of a wholesale market structure.  See EEI's Initial Comments (pp. 86-94) in the SMD NOPR for more information.

Find out about electric company Efficiency and Demand Response Programs  and ways to Use Energy Wisely.

As part of the Federal Energy Management Program, the U.S. government is also tracking efficiency and demand response programs.

© 2008 Edison Electric Institute