Benefits of Participating in Demand Response Programs

Oct 22, 2020

Demand Response Programs are available throughout California allowing utilities to work with customers to reduce their electricity demand during certain hours or events. Signals are sent to customers to remotely reduce energy consumption. These programs also give customers the opportunity for financial incentives ($200-300 per kW of load reduction for automated response equipment), discounted electricity rates (up to $9/kW monthly incentive), LEED points, and other programs described below:

  • LEED Points
    Under the LEED BD&C New Construction v4 rating system, two points are available for participating in a semi-automated or automated demand response program for at least one year. 10% of the building’s peak electricity demand must be shed during events.
  • Incentives – PG&E, SCE, and SDG&E all have incentives available for both automated and semi-automated programs:
    • PG&E Incentives:
      • Peak Day Pricing: an optional rate that offers discount on regular summer rates in exchange for higher prices during 9 to 15 peak pricing events per year.
      • Base Interruptible: For customers with an average maximum demand of at least 100 kW, earn a monthly incentive for reducing energy consumption to prescribed levels when called upon.
      • Capacity Bidding: create a plan that allows you more flexibility in reaching reduced energy usage when called upon.
      • Automated Demand Response: enroll in select programs to be eligible for equipment rebates and added incentives through Automated Demand Response.
      • Other programs – see the link below for additional programs available.
        Link: https://www.pge.com/en_US/large-business/save-energy-and-money/energy-management-programs/energy-incentives.page
  • SCE Incentives:
    • Automated Demand Response: By installing technologies that automatically reduce energy usage during demand response events, you will not only qualify for technology incentives, but you may also start seeing bill savings.
    • Capacity Bidding: earn payments for agreeing to reduce your energy use during events, when resources become constrained.
    • Critical Peak Pricing (CPP): a discount on summer electricity rates in exchange for higher prices during 12 CPP event days per year.
    • Real-time Pricing: reduce energy usage during hours with higher temperature-driven prices, and/or shift usage to lower-priced hours.
    • Scheduled Load Reduction: If you are a large business or industrial customer with the flexibility to reduce load for a few hours between 8:00 A.M. and 8:00 P.M. (Monday through Friday, excluding holidays) in the summer months, you will receive credits on your bill.
    • Base Interruptible: designed to reduce energy usage based on your energy needs, which will earn you valuable bill credits for reducing your energy use during a system reliability event.
    • Other programs – see the link below for additional programs available.
      Link: https://www.sce.com/business/demand-response
  • SDG&E Incentives
    • AC Saver: SCE installs an AC Saver Device on the AC units to cycle the air when energy conservation is needed. A bill credit based on the total amount cycled will is issued accordingly.
    • Base Interruptible: If your business can reduce energy on certain days, you may receive lower electricity costs. When SDG&E calls for conservation, you choose how much electricity you can reduce. It could lead to annual savings of up to $7,500.
    • Capacity Bidding: Your business decides how much energy it can shed on certain days when energy conservation is needed. If your business can respond you receive incentive payments.
    • Technology Incentives (Automated Demand Response): Incentives to purchase and install fully automated energy management systems to automatically accept signals. Receive incentives for equipment and save money on energy.
    • Other programs – see link below for additional programs available
      Link: https://www.sdge.com/businesses/savings-center/energy-management-programs/demand-response

Participating in Demand Response Programs allows customers to receive monetary incentives from their utility providers and earn LEED points on projects pursuing LEED certification. In addition to customer benefits, these programs assist the utilities in matching the power demand with the supply, which can help customers avoid high energy prices and/or improve system reliability. For more information on which incentive program may be most appropriate for your project, contact Moe Fakih at VCA Green below.

Contributing Writer: Mahmoud Harb, Project Manager

Moe Fakih, Principal
mfakih@vca-green.com
714-363-4700 x501