Why is Demand Response Important?

• Deregulation of the electric industry gives customers tremendous opportunities to lower their electricity costs by participating in wholesale markets with Demand Response.
• Savvy customers are dramatically reducing their energy costs and demonstrating their commitment to the environment by participating in Demand Response programs. Customer participation in Demand Response is increasing rapidly – some areas have seen more than 100% year over year increases in participation.
• Increases in market efficiency - a demand reduction of just 4% can cause a more than 50% reduction in short term electricity price spikes, thus lowering the overall price of power for ALL customers, not just those directly participating in Demand Response programs.
• Demand Response is cheaper than the marginal and environmental cost of new peaking power plants, thus capital can be deployed more efficiency elsewhere.

Who Participates In Demand Response?

Demand response participation is growing rapidly. Most regions of the country experienced enrollment growth of 70% or more from 2006 to 2007 alone. Typical customers include multi-site or large retailers, healthcare, manufacturers, high rise office buildings, data centers, grocery stores and many others. Many customers tap into the power of their energy management systems to facilitate demand reductions. Generally for commercial customers, a minimum 100 kilowatt demand reduction is needed to participate.

How Does Demand Response Work?

Many demand response programs are sponsored by Independent System Operators (ISOs) that manage regional power grids and markets. A customer and Suez work together to come up with a demand reduction strategy - how much load reduction is available over which times of day. Suez will manage the interface with the ISO to maximize the financial benefits the customer receives for participation in a specific program. Customers can receive payments for reducing their load for either economic or reliability programs. Click on the ISO links on this page to see a more detailed description of programs available within that region.

How Often Will I Have To Curtail?

That varies with the program type and location. Generally, reliability programs are called as a last line of defense before rolling blackouts and are just a few hours per year. They generally have a test once a year whether the capacity is needed or not. Economic programs are voluntary and the customer can participate as much as they want depending on the market price of power – the more hours of participation the higher the financial benefit. The ancillary services programs require quick response times but are usually only a few minutes in length. A summary of the program characteristics are on the market pages. Just click on the links to see more.

Where Is It Available?

Suez provides Demand Response in the ERCOT, New England ISO, New York ISO and PJM market areas. Suez offers Demand Response solutions for almost any customer situation. Click on a link to see program descriptions for each area.

The Three Basic Types of Demand Response:

Keyword: Volatility
Economic Programs – Customers can bid their load reduction into wholesale real-time and day-ahead power markets, just like a large generation station does. For this they can receive the economic benefit of high power prices during periods of extreme volatility.

Keyword: Safety
Reliability Programs – A Customer offers to reduce their load during times of extreme system demand, and receive ongoing “standby” capacity payments for doing so, even if they are not called on as a resource. The customer helps to prevent potential brownouts or blackouts.

Keyword: System Stability
Ancillary Services – Customers can bid their quick-response load reduction capabilities into the wholesale ancillary services market to augment and supplement services provided by large generation stations, receiving payments for doing so. And they are assisting with the overall operational stability of the power grid.