ACHRNEWS

Sept. 4, 2006: Demand Response Helps Utilities Ride Through Record Heat

September 4, 2006

VALLEY FORGE, Pa. - High temperatures in early August resulted in record power demands across the country, but many utilities managed to avoid widespread power outages by using their demand response networks.

Customers participating in these demand response networks offer to reduce their usage during peak demand and are paid the market value of the electricity saved. This allows utilities to avoid using the most expensive generators, reducing demand to meet the power grid needs instead of increasing the electricity supply. Demand response benefits all customers by lowering long-term electricity prices.

PJM Interconnection, which operates the power grid in a 13-state region from Illinois to Delaware, estimated that demand response resulted in price reductions of $650 million in energy payments for one week in early August.

Publication date: 09/04/2006