Commercial energy

9 Strategies for Businesses that Want to Take Advantage of Auto Demand Response Savings

By Cristina Soeiro

Automated Demand Response, which uses technology to automatically regulate commercial energy usage during peak times of consumption, has become an effective way for businesses to reduce energy usage, utility costs and environmental impact.

By working with PG&E, businesses in California can design and implement an Automated Demand Response program that is aligned with their operations. These specialized Automated Demand Response programs allow businesses to realize substantial short- and long-term financial and environmental rewards without making major sacrifices or spending a lot of money on upfront investments.

What is Automated Demand Response and how does it work?
When commercial energy usage hits its highest levels, which occurs during peak hours and typically the hottest days of summer, PG&E encourages businesses to reduce their consumption through a combination of financial incentives and technical assistance. This overall initiative is referred to as demand response.

Automated Demand Response allows businesses to design and implement a demand response program without relying on human intervention, instead simply using automated systems to handle the work. To encourage enrollment in Automated Demand Response programs, PG&E offers a number of incentives.1 In addition, many Auto Demand Response incentives can be coupled with applicable and approved energy efficiency rebates for even greater savings.

One concern business owners and managers have about Automated Demand Response programs is a possible reduction in operational efficiency or, in the case of hospitality businesses, customer comfort.

However, as the San Francisco Marriott proved when it instituted a demand response program, energy reduction goals can be easily met with Automated Demand Response without hurting either operations or guest comfort. The Marriott experienced significant environmental and financial savings with reduced utility bills, and helped leadership at the hotel gain greater understanding and control of the location’s energy systems.2

9 Automated Demand Response energy saving tips, strategies, and benefits3

1. Build an audit with PG&E Automated Demand Response staff
The first step in designing and implementing an Automated Demand Response project is to gain a greater understanding of how a business currently uses energy during peak times and days. This process involves working with Automated Demand Response program staff to audit a business’s commercial energy usage, including how a business consumes energy during peak demand, the size of a business’s facility, and a business’s ability and willingness to curtail loads during demand events.

2. Choose load reduction goals
Before moving forward, a business owner and/or manager needs to lay out a set of load reduction goals they hope to realize by implementing an Automated Demand Response program. The most important part of this process is determining how much energy consumption a business is willing and able to shift from critical peak demand times to times when overall system loads are lighter.

3. Select and enroll in a PG&E Automated Demand Response program
Based on a building audit and a business’s threshold for shifting energy during peak demand, a business owner and/or manager will work with PG&E Automated Demand Response staff to enroll in an Automated Demand Response program that is specialized for each business. This is the decision phase, and it will serve as the basis for Automated Demand Response program implementation.

4. Apply for Automated Demand Response incentives
Once an Automated Demand Response program has been selected, a business owner and/or manager will fill out an incentive reservation form. Upon positive review of the form, PG&E will reserve the applicable incentives for a business’s Automated Demand Response program and a business will officially become a program participant.

5. Have project specifications reviewed by PG&E Automated Demand Response staff
Before moving forward with a project, PG&E Automated Demand Response staff will review a project’s specifications, including any equipment that needs to be installed. This final approval process serves as a blueprint for all the measures that will need to be implemented in order for a program to be successful.

6. Purchase and install the proper equipment
By working with PG&E’s Automated Demand Response staff and/or sales and service representatives, along with a qualified contractor, businesses that are participating in the automated demand response program will follow through with installing the proper equipment. PG&E’s Automated Demand Response staff and the contractor can offer expert advice on purchasing and installing the proper equipment as befits each individual business.

7. Have project equipment inspected and verified
Once project equipment has been installed, the PG&E Automated Demand Response staff will inspect and verify the results. The inspections are usually scheduled during or close to a Demand Response event so that project staff can get accurate measurements of a project’s effectiveness. The inspections must be scheduled ahead of time and normally take just two to three hours.

After PG&E’s Automated Demand Response staff inspects and verifies the project, an Automated Demand Response program will be officially operational and it is time to start reaping the rewards of enrollment and installation, including the first installment of the incentive payment.

8. Participate in ongoing performance monitoring
Ongoing performance monitoring is necessary to insure that an Automated Demand Response program is living up to its efforts to reduce energy usage during demand events. PG&E’s Automated Demand Response staff will work with a business owner and/or manager to provide performance feedback and tackle any technical difficulties.

9. Evaluate project and receive incentive payment
At the end of the first full demand response season (usually May 1 - October 31) following project installation, PG&E’s Automated Demand Response team will conduct an evaluation of the business’s demand response event performance. The performance evaluation takes place no later than 12 months after project installation.

The performance evaluation will determine the amount of the second incentive payment, which is based on the kilowatt-hour reductions that are achieved over the average of all demand response events during the evaluation period. Once the performance evaluation has been completed, the second incentive payment will be issued.

Automated Demand Response's temporary reduction in energy consumption in exchange for financial incentives allows for California businesses to achieve effective cost and energy savings without having to make significant long-term sacrifices or spend a lot of money on an upfront investment. To learn about additional cost-saving tips, check out PG&E's free eBook, "25 Money-Saving Tips for Businesses".

  1. Automated Demand Response Program
  2. Pacific Gas and Electric Company
  3. Pacific Gas and Electric Company

Learn how to receive incentives for reducing energy usage during peak times of the day or year with an auto demand response program here:
  • SMB Blog Author
    Cristina Soeiro
    Cristina manages Marketing Strategy for industrial, commercial and residential demand response at PG&E. She has 10+ years in sustainable energy management with data driven, demand-side strategic marketing. Through demand response including energy storage, PG&E customers receive ongoing bill savings, use cleaner energy, and gain new technology incentives.

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