What is Demand Response?

Occasional storms and heat waves, as well as periodic power plant repairs and maintenance, have the potential to affect California's supply and demand for electricity. When demand is high and supply is short, power interruptions can sometimes be the result. Building enough power plants to satisfy every possible supply and demand scenario is one possibility, but the cost and environmental impact of that would be tremendous.

Demand response programs are designed to be both fiscally and environmentally responsible ways to respond to occasional and temporary peak demand periods. The programs offer incentives to businesses that volunteer and participate by temporarily reducing their electricity use when demand could outpace supply.

Demand response provides a way for your company to advance power reliability on your terms. Your voluntary participation will help enhance electricity reliability for all California businesses—which is great news for you, other businesses and all Californians. With demand response, you can take small (and big) steps to reduce your electricity demand. And by doing so, you'll be giving a whole lot back—and earning incentives, too.

Demand response days are declared when demand for electricity threatens to outpace supply, which typically can occur during hot summer days. Additionally, this can happen if generation facilities are closed for maintenance, transmission lines are damaged, or during periods when the price to purchase added electricity escalates.

It is simple economics—building and maintaining enough power plants to satisfy occasional and temporary peaks in demand would impact rates and the environment. Major capital investment projects with low utilization are not in the best interest of California businesses or our environment. Instead, by temporarily reducing demand when resources reach capacity, we have a more fiscally and environmentally responsible solution to help protect the environment and stabilize energy systems.

For information not answered here, you may find answers at Frequently Asked Questions.