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Demand Response – Another Way to Save on Energy Bills

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When most people think of ways to lower their energy bills, they usually think of conservation – turn off lights, turn up the air conditioner a couple of degrees, use ceiling fans, etc. Many folks also turn to energy efficiency. Thinking of replacing that old refrigerator? Look for an ENERGY STAR qualified model and you may qualify for a utility rebate. Light bulbs go out? Replace them with CFL’s which give just as much light but use only ¼ the electricity.

But there is another arrow in your quiver that you may not be familiar with. It’s called demand response, and your local utility company may offer incentives to participants of such programs.

What is Demand Response?

At any given moment in time your home is drawing upon the grid for electricity, and the amount of electricity you need at that moment is your electric demand. It changes depending on what you turn on in your home. In the middle of the night, the demand is usually very low because nearly everything is off. But on a hot summer afternoon, your demand may be very high because in addition to TV, lights, and other appliances, your air conditioner is also hard at work keeping your home cool.

We often take it for granted, assuming that there will always be electricity when we need it, no matter how much we use at one time. But as Californians experienced in 2001, it’s not a foregone conclusion. If there isn’t enough capacity to meet consumers demand, rolling blackouts are the unfortunate result. And that’s not good for anyone – not customers, not businesses, and not the utilities.

To help prevent rolling blackouts – and avoid the need to build new power plants – many utilities offer demand response programs. When they anticipate very high demand, they call an “event” and participating customers are asked to reduce their electric demand during the peak hours of that day, usually between 2pm and 7pm. In return for your participation, the utilities usually offer a monetary incentive.

Will I Have to Turn Everything Off?

There are different types of demand response programs, but none of them require that you turn everything off. Some limit how much your air conditioner can run. Others simply pay you an incentive based on the amount of energy you saved compared to your recent average.

So if you’re looking for ways to save on your energy bill, contact your local utility company and see what demand response programs they offer and see if any of them meet your needs.