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ACTUAL FORECAST

National Action Plan on

Demand Response

the federal energy regulatory 

commission staff

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National Action Plan on 

Demand Response

THE FEDERAL ENERGY REGULATORY

COMMISSION STAFF 

June 17, 2010

Docket No. AD09-10

Prepared with the support of

The Brattle Group • GMMB • Customer Performance Group

Definitive Insights • Eastern Research Group 

The opinions and views expressed in this staff report do not necessarily represent those of the Federal Energy 

Regulatory Commission, its Chairman, or individual Commissioners, and are not binding on the Commission.

FEDERAL ENERGY REGULATORY COMMISSION 

WASHINGTON, DC 20426 

OFFICE OF THE CHAIRMAN 

Message From the Chairman

When Congress enacted the Energy Independence and Security Act of 2007 (EISA), it directed the

Federal Energy Regulatory Commission (FERC or Commission), an independent regulatory commission, to

develop a National Action Plan that 1) identifies the requirements for technical assistance to states to

allow them to maximize the amount of demand response that can be developed and deployed; 2) designs

and identifies requirements for implementation of a national communications program that includes

broad‐based customer education and support; and 3) develops or identifies analytical tools, information,

model regulatory provisions, model contracts, and other support materials for use by customers, states,

utilities, and demand response providers.

Today, I am pleased to announce the publication of the Commission’s National Action Plan on

Demand Response (National Action Plan), which identifies strategies and activities to achieve the

objectives of EISA.  The National Action Plan has been developed through an open and transparent

process.  As such, the National Action Plan has been informed by a broad array of comments, and its

success will depend on the participation of a broad spectrum of actors, private and governmental, that

may currently or in the future have a role in the implementation of the National Action Plan.  I would like

to extend my sincere appreciation to the many commenters who have contributed to the development of

the National Action Plan and ask for their continued support throughout its implementation.   

The release of this National Action Plan should be viewed as a proposal by FERC staff outlining an

approach to achieving greater demand response consistent with the requirements of EISA, not a decision

by the Federal Government to implement this particular approach.  FERC staff is aware that the

Administration and Congress must balance many competing priorities and it will be the Administration

and Congress who will determine how the National Action Plan fits into federal policy and budget

priorities.  Nevertheless, the National Action Plan offers a path to achieve the goals of EISA and, together

with the U.S. Department of Energy, the Commission and its staff will work to develop an implementation

plan to present to Congress later this year.

Jon Wellinghoff

Chairman

Federal Energy Regulatory Commission

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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

National Action Plan on Demand Response i 

Acknowledgments 

Federal Energy Regulatory Commission Staff Team

David Kathan, Team Lead

Caroline Daly

Eric Eversole

Maria Farinella

Jignasa Gadani

Ryan Irwin

Cory Lankford

Adam Pan

Christina Switzer

Dean Wight

Key Consultant Support

The Brattle Group: Ahmad Faruqui, Ryan Hledik

GMMB: Susan DiLiddo Michels, Tanja Hester

Customer Performance Group: Peter Honebein, Roy Cammarano

Definitive Insights: David Lineweber, Ph.D.

Eastern Research Group: Christopher Lamie, Linda Cook
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

ii National Action Plan on Demand Response

Table of Contents

EXECUTIVE SUMMARY .................................................................. ES-1

Introduction ........................................................................................ES-1

Strategic Vision ....................................................................................ES-2

Strategies and Activities.........................................................................ES-2

INTRODUCTION................................................................................. 1

Legislative Mandate................................................................................... 2

Background on Demand Response............................................................... 3

Defining Demand Response ................................................................... 3

Relationship Between Demand Response and Smart Grid ........................... 4

The Geography of Demand Response ...................................................... 5

The Objective of the National Action Plan...................................................... 6

Sidebar 1: Demand Response in Organized Markets ....................................... 7

Process for Developing the National Action Plan............................................. 8

Overview of Stakeholder Feedback .............................................................10

Structure of the National Action Plan...........................................................15

PART 1: STRATEGIC VISION OF THE NATIONAL ACTION PLAN........ 17

1.1 The Coalition......................................................................................17

Why Should a Coalition Be Involved in Implementing the National Action

Plan?................................................................................................. 17

Who Should Be Involved?.....................................................................18

What Elements Make a Coalition Successful? ...........................................18

How Should the Coalition Operate? ........................................................19

1.2 Examples of the Coalition Approach.......................................................20

The National Action Plan for Energy Efficiency .........................................20

Sidebar 2: Coordination of Energy Efficiency and Demand Response...........21

The Air Bag and Seat Belt Safety Campaign ............................................22

PART 2: STRATEGIES AND ACTIVITIES............................................ 23

2.1 Technical Assistance to States ..............................................................24

Introduction .......................................................................................24

Technical Assistance Actions ................................................................. 26

Establish a National Forum ...................................................................26

Conduct Informational and Educational Sessions for Policymakers and 

Regulators .........................................................................................27
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

National Action Plan on Demand Response iii

Build a Panel of Demand Response Experts .............................................29

Sponsor Technical Papers .....................................................................30

Establish a Program for Technical Assistance for Demand Response............31

Provide Demand Response Grants .........................................................32

2.2 National Communications Program........................................................34

Introduction .......................................................................................34

Objectives of the National Communications Program ................................38

National Communications Program Structure...........................................39

2.3 Tools and Materials For Use by Customers, States, and Demand Response

Providers ................................................................................................58

Develop a Web-based Clearinghouse of Demand Response Materials ..........59

Develop or Enhance Demand Response Estimation Tools and Methods ........67

Sidebar 3: The DRIVE Model................................................................. 79

APPENDIX A: RESEARCH GAPS ....................................................... A-1 

Social Science Research Issues ................................................................ A-1

Technical Research Issues ....................................................................... A-2

APPENDIX B: EXAMPLES OF DEMAND RESPONSE PROGRAMS......... B-1 

Retail Programs ..................................................................................... B-2

Arizona............................................................................................ B-2

California ......................................................................................... B-2

Connecticut...................................................................................... B-3

Delaware ......................................................................................... B-4

Florida............................................................................................. B-4

Georgia ........................................................................................... B-6

Illinois ............................................................................................. B-6

Massachusetts .................................................................................. B-7

Michigan .......................................................................................... B-8

Washington, D.C. ............................................................................ B-10

Wholesale Programs .............................................................................. B-12

APPENDIX C: LIST OF COMMENTERS .............................................. C-1 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

iv National Action Plan on Demand Response

List of Figures

Figure 1: Functional Overlap in Some National Action Plan Activities.....................23

Figure 2: Program Structure ...........................................................................36

Figure 3: Program Development and Rollout Sequence Over Time........................37

Figure 4: Interaction Between the Communications Umbrella and Local 

Implementation ............................................................................................40

Figure 5: Regional Demand Response Potential ............................................... B-1

Figure 6: PowerCentsDC Pilot Program Sample Bill.......................................... B-11

List of Tables

Table 1: Segmentation of Message Framework..................................................46

Table 2: Strategies and Activities ....................................................................77

Table 3: Wholesale Programs....................................................................... B-12
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Executive Summary ES-1

Executive Summary

Introduction 

he Federal Energy Regulatory Commission (FERC or Commission) is required to develop 

the National Action Plan on Demand Response (National Action Plan) as outlined in 

section 529 of the Energy Independence and Security Act of 2007 (EISA), entitled “Electricity 

Sector Demand Response.”1

1. Identify “requirements for technical assistance to States to allow them to maximize 

the amount of demand response resources that can be developed and deployed.” 

 This National Action Plan is designed to meet three objectives: 

2. Design and identify “requirements for implementation of a national communications 

program that includes broad-based customer education and support.” 

3. Develop or identify “analytical tools, information, model regulatory provisions, 

model contracts, and other support materials for use by customers, states, utilities, 

and demand response providers.” 

The National Action Plan is intended to be an action plan for the nation for implementation 

by states, localities, and regions. Although its actions apply to the entire country, the 

National Action Plan recognizes, as Congress intended, the important role that state and local

governments play in developing demand response. The coordinated efforts of federal, state, 

and local lawmakers and regulators are needed to enable achievement of the nation’s demand 

response potential. 

To develop an action plan for the nation, FERC staff solicited and accepted input and 

participation from a broad range of industry stakeholders; local, state, and federal governing 

officials including state regulatory utility commissioners; and nongovernmental groups 

including trade associations. FERC staff conducted extensive outreach to a broad range of 

entities and used the input to develop A Discussion Draft on Possible Elements for the 

National Action Plan2 for public comment. A nationally webcast technical conference was 

held to encourage further input and participation from all interested entities. After the 

conference, written comments were accepted by the Commission.3

 

1

 Energy Independence and Security Act of 2007, Pub. L. No. 110-140, § 529, 121 Stat. 1492, 1664 

(2007) (to be codified at National Energy Conservation Policy Act, 42 U.S.C. §§ 8241, 8279).

 A draft of the National 

Action Plan was prepared after reviewing the many ideas that reflect the diverse views of a 

2

 Discussion Draft on Possible Elements for the National Action Plan (Oct. 2008), available at

http://www.ferc.gov/EventCalendar/Files/20091028124306-AD09-10-000-Discussion.pdf (Discussion 

Draft). 

3

 Docket No. AD09-10.

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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

ES-2 Executive Summary

broad range of entities. This National Action Plan reflects comments received on the Draft 

for Comment of the National Action Plan.4

Strategic Vision

This National Action Plan calls for the formation of a Coalition to implement the National 

Action Plan. Coalitions represent a way of harnessing the collective energy of a variety of 

individual organizations and yielding outcomes that have greater reach and depth than those 

organizations would achieve acting individually. The Coalition would coordinate the efforts 

of state/local governing officials, utilities/load-serving entities, demand response providers, 

regional transmission organizations/independent system operators (RTOs/ISOs), consumer 

advocates, commercial/industrial customers, the federal government, existing coalitions, and 

other stakeholders with respect to the strategies and activities described in the National 

Action Plan.

One or more federal agencies participating in the Coalition (for example, the U.S. Department 

of Energy (DOE) where appropriate) could direct and (if funds are available) fund 

implementation of certain identified activities of the National Action Plan. Activities 

identified in the National Action Plan that lend themselves to being accomplished by private 

entities would be accomplished using private funding. The work of these private entities 

would be coordinated with that of federal, state, and local agencies through the Coalition. In 

addition, it also may be useful for an entity or a federal agency (for example, FERC and DOE) 

to coordinate and ease implementation by charting the progress of both federal and private 

efforts to complete the National Action Plan activities, identifying any gaps in 

implementation and, where appropriate, encouraging and working with other members of 

the Coalition to fill the gaps. 

Strategies and Activities

The National Action Plan consists of strategies and activities to achieve three objectives: 

technical assistance to states, a national communications program, and the development or 

identification of tools and materials for use by customers, states, and demand response 

providers. 

1. Technical Assistance to States 

The National Action Plan is designed to make available to states the necessary technical 

assistance to implement effective demand response programs. Such assistance may include: 

• Identifying a panel of demand response experts to help inform various 

constituencies about demand response programs, products, technologies, and 

 

4

 Draft for Comment of the National Action Plan on Demand Response (March 2010), available at

http://www.ferc.gov/legal/staff-reports/03-12-10-demand-response.pdf (Draft National Action Plan).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Executive Summary ES-3

incentives and their costs and benefits. Ideally, these experts would be identified as 

those persons having conducted primary and secondary research in the field (as 

evidenced by authorship of technical papers), with knowledge of local and regional 

issues, and the independence to conduct an unbiased assessment. 

• Sponsoring or conducting primary and secondary research targeted to various 

practical aspects of demand response implementation (e.g., sponsorship of technical 

papers or pilots), and providing technical assistance for demand response. 

• Sponsoring and participating in national and regional forums and sessions that will 

provide information to policymakers, stakeholders, and consumers on efforts to 

achieve the National Action Plan, as well as research conducted under the National 

Action Plan. 

These steps are meant to be complementary, but the federal agencies, the Coalition, and other 

private sector actors could implement them as needed, picking and choosing the actions that 

will best utilize their resources and that have the greatest value for each actor. 

2. National Communications Program 

EISA requires that the National Action Plan on Demand Response design and identify 

requirements for implementation of a national communications program that includes broadbased customer education and support. The national communications program should have a 

multifaceted structure, meaning it would develop and support communications through 

multiple channels and media to communicate as appropriate with the many audiences for 

demand response. This plan for a national communications program includes three elements:

a Communications Umbrella; local implementation; and direct outreach to states, 

policymakers, and partners. 

The Communications Umbrella, as a national platform, would create and provide a consistent, 

yet flexible, research-based message framework. This platform would include 

communications tools, support, and advice that could be adapted for use by interested local 

demand response implementers.5

A local implementation strategy could be designed based on this platform to inform 

residential and commercial customers about the availability and possible benefits of demand 

response programs, products, technologies, and incentives. Interested local demand response 

implementers could use the research-based message framework and communications tools 

 It also would communicate directly with large commercial 

and industrial customers to inform them of opportunities to participate in demand response 

programs and the benefits of doing so.

 

5

 Local demand response implementers are entities, such as state or local governing officials, utilities, 

load-serving entities, and other demand response providers, interested in providing demand response 

programs, services, rates, incentives, etc., at a local level. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

ES-4 Executive Summary

and tactics developed by the Communications Umbrella to tailor messages and materials and 

conduct outreach toward their particular customers. 

The national communications program also should have a broad national mission to provide

outreach to states, policymakers, and national partners whose support would be needed to 

develop cost-effective and beneficial demand response, particularly in areas where there are 

no existing demand response programs or current plans to implement such programs.

These strategies, national and local, would occur concurrently based both on their priority 

level and on the steps that must occur prior to each stage of the program rollout. Many of the 

tasks undertaken by the Communications Umbrella, such as foundational market research, 

would necessarily precede local implementation and direct outreach. However, the 

experiences of local demand response implementers, national partners, and policymakers will 

also inform future program development and message framework development under the 

Communications Umbrella. 

3. Tools and Materials 

The plan for the development, enhancement, or dissemination of tools and materials involves 

two general categories of action: 1) a Web-based clearinghouse and 2) tools and methods for 

assessing the impacts, costs, benefits, and operation of demand response programs.

A Web-based clearinghouse should be established to provide stakeholders with the most 

current information and analyses on demand response. The Web-based clearinghouse could 

include existing research as well as new research sponsored by the federal agency or the 

Coalition under the National Action Plan. The Web-based clearinghouse would serve as a 

centralized location for collecting all publicly available information on demand response, 

including regulatory documents, program reports, and other general information. The 

clearinghouses may be incorporated as part of an existing clearinghouse operated by a federal 

agency (e.g., Smart Grid Information Clearinghouse) or may be operated and maintained by 

the Coalition or one of its stakeholders. The clearinghouse should provide information that 

stakeholders can use to make their own evaluations and judgments about the reports and data 

that they are able to access through the clearinghouse.

Existing analytical tools and methods will need to be enhanced or developed to aid the 

expansion of existing demand response programs and the creation of new programs; to 

advance the use of demand response to support reliable and efficient operations of wholesale 

transmission, energy, capacity, and ancillary services markets; and to better enable end-use 

consumers to act optimally while enrolled in a demand response program. The Coalition will 

provide input and guidance to organizations in enhancing or developing tools and methods. 

These organizations could engage in new research identifying beneficial characteristics of 

existing tools or meet through conference venues specifically set up to foster informationsharing on current successful examples. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Introduction 1

Introduction 

emand response is a valuable resource for meeting the nation’s energy needs. By 

lowering the peak demand for energy, demand response programs reduce the need to 

construct new, expensive generation units. However, according to a Federal Energy 

Regulatory Commission (FERC or Commission) staff report — A National Assessment of 

Demand Response Potential (National Assessment), submitted to Congress in June 2009 — 

current demand response programs tap less than a quarter of the total market potential for 

demand response.6

FERC staff has worked with stakeholders to develop this National Action Plan on Demand 

Response (National Action Plan), which sets out actions to achieve the demand response 

potential in the United States. Congress required FERC to develop such a plan in the Energy

Independence and Security Act (EISA) of 2007.

 Because current efforts have missed a significant portion of the costeffective demand response potential, it is evident that action needs to be taken to either 

create new programs or expand existing ones where cost-effective. 

7

To develop an action plan for the nation, FERC staff and their consultants solicited and 

accepted input and participation from a broad range of industry stakeholders; local, state, and 

federal governing officials including state regulatory utility commissioners; and 

nongovernmental groups including trade associations. FERC staff conducted extensive 

outreach to a broad range of entities and used the input to develop A Discussion Draft on 

Possible Elements for the National Action Plan

 As such, the National Action Plan is

intended to be an action plan for the nation, for implementation by states, localities, and 

regions. Although its actions apply to the entire country, the National Action Plan 

recognizes, as Congress intended, the important role state and local governments play in 

developing demand response. The coordinated efforts of federal, state, and local lawmakers 

and regulators are needed to enable achievement of the nation’s demand response potential. 

8 for public comment. A nationally webcast 

technical conference was held to encourage further input and participation from all 

interested entities. After the conference, written comments were accepted by the 

Commission.9

 

6

 A National Assessment of Demand Response Potential (June 2009), available at

 A draft of the National Action Plan was prepared after reviewing the many 

http://www.ferc.gov/legal/staff-reports/06-09-demand-response.pdf (National Assessment). 

7

 Energy Independence and Security Act of 2007, Pub. L. No. 110-140, § 529, 121 Stat. 1492, 1664 

(2007) (to be codified at National Energy Conservation Policy Act, 42 U.S.C. §§ 8241, 8279).

8

 Discussion Draft on Possible Elements for the National Action Plan (Oct. 2009), available at

http://www.ferc.gov/EventCalendar/Files/20091028124306-AD09-10-000-Discussion.pdf (Discussion 

Draft). 

9

 Docket No. AD09-10.

D
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

2 Introduction

ideas that reflect the diverse views of a broad range of entities.10

This introduction provides an overview of the National Action Plan, the process behind its 

development, and context for understanding it. 

 This National Action Plan 

reflects comments received on the Draft National Action Plan. 

Legislative Mandate

Congress required FERC to develop the National Action Plan as the second stage of a threestage process that is outlined in section 529 of EISA, entitled “Electricity Sector Demand 

Response.”11

The three-stage process began with the National Assessment, which was submitted to 

Congress in June 2009. The National Assessment evaluated the national- and state-level 

potential for demand response that can be achieved within five and 10 years.

 

12

In the second stage, FERC is following Congressional direction to develop the National 

Action Plan. This document is designed to meet three objectives:

 Additionally, 

the National Assessment identified barriers that have limited the deployment of demand 

response. The National Assessment also included specific policy recommendations that, if 

implemented, could overcome these barriers. 

1. Identify “requirements for technical assistance to States to allow them to maximize 

the amount of demand response resources that can be developed and deployed.” 

2. Design and identify “requirements for implementation of a national communications 

program that includes broad-based customer education and support.” 

3. Develop or identify “analytical tools, information, model regulatory provisions, 

model contracts, and other support materials for use by customers, States, utilities, 

and demand response providers.” 

In the third stage, which will commence once the National Action Plan has been developed, 

EISA requires “the Commission, together with the Secretary of Energy” to submit a proposal 

to implement the National Action Plan to Congress. EISA requires the implementation 

proposal to “include specific proposed assignments of responsibility, proposed budget 

amounts, and any agreements secured for participation from state and other participants.”13

 

10 Draft for Comment of the National Action Plan on Demand Response (March 2010), available at

http://www.ferc.gov/legal/staff-reports/03-12-10-demand-response.pdf (Draft National Action Plan). 

11 EISA section 529.

12 National Assessment, supra note 6. 

13 EISA section 529(c).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Introduction 3

Background on Demand Response

Defining Demand Response

Before discussing the actions set out in the National Action Plan, it is necessary to define the 

term “demand response” as it is used here. 

The Commission uses “demand response” to refer to the ability of customers to respond to 

either a reliability trigger or a price trigger from their utility system operator, load-serving 

entity, regional transmission organization/independent system operator (RTO/ISO), or other 

demand response provider by lowering their power consumption. For many years, the term 

was used to refer to peak clipping actions that were confined to a limited number of hours of 

the year. As adopted in Order No. 719, the Commission defined “demand response” to mean 

“a reduction in the consumption of electric energy by customers from their expected 

consumption in response to an increase in the price of electric energy or to incentive 

payments designed to induce lower consumption of electric energy.”14

Demand response can be both dispatchable and non-dispatchable. “Dispatchable demand 

response” refers to planned changes in consumption that the customer agrees to make in 

response to direction from someone other than the customer. It includes direct load control 

of customer appliances such as those for air conditioning and water heating, directed 

reductions in return for lower rates (called curtailable or interruptible rates), and a variety of 

wholesale programs offered by RTOs/ISOs that compensate participants who reduce demand

when directed for either reliability or economic reasons. This direction to reduce load can be 

in response to acceptance of the consumer’s bid to sell its demand reduction at a price in an 

organized market (a wholesale price-responsive demand response) or to a retail provider. 

“Non-dispatchable demand response” refers to programs and products in which the customer 

decides whether and when to reduce consumption based on a retail rate design that changes 

over time. This is sometimes called retail price-responsive demand and includes dynamic 

pricing programs that charge higher prices during high-demand hours and lower prices at 

other times.

As used in this document, the term “demand response” includes consumer actions that can 

change any part of the load profile of a utility or region, not just the period of peak usage. As 

a result of technology innovations and policy directions, new types and applications of 

demand response are emerging. In particular, consumer response to signals from a utility 

system operator, load-serving entity, RTO/ISO, or other demand response provider can be 

deployed to shape any or all parts of a customer’s load profile. This concept of demand 

response encompasses the effect of smart appliances or devices in customer dwellings that can 

respond automatically in near real-time to the signals of a utility, load-serving entity, or other 

 

14 See Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, FERC Stats. & 

Regs. ¶ 31,281 (2008), order on reh’g, Order No. 719-A, 74 Fed. Reg. 37,776 (Jul. 29, 2009), FERC 

Stats. & Regs. ¶ 31,292 (2009), order on reh’g, Order No. 719-B, 129 FERC ¶ 61,252 (2009).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

4 Introduction

demand response provider, or to changes in bulk power system conditions such as a change in 

system frequency. It also includes the smart integration of changeable consumption with 

variable generation as one method to better enable the addition of new technologies (such as 

wind farms and rooftop solar systems) to utility systems or customer premises. Demand 

response also includes deployment of devices that can manage demand as needed to provide 

grid services such as regulation and reserves, and can also manage power flows into and out of

energy storage devices such as plug-in hybrid electric vehicle (PHEV) batteries to provide 

these same grid services. Demand response can go beyond simple reduction in peak period 

consumption to include shifting consumption from peak to off-peak hours. For example, the 

use of thermal energy storage devices may be advanced through the use of time-of-use rates15

Relationship Between Demand Response and Smart Grid

that encourage nighttime charging of home energy storage systems, PHEVs, and all-electric 

vehicles. 

The smart grid and demand response are intrinsically linked in many areas of application. 

Many of the benefits associated with investment in the smart grid, such as better consumer

management of electricity usage in response to prices or signals from grid operators, are, at 

their core, demand response actions. In turn, investments in some smart grid technologies, 

such as smart meters, help enable the demand response potential identified in the National 

Assessment. The Commission acknowledges this linkage in its proposed Smart Grid Policy 

Statement and Action Plan issued in March 2009: 

Smart Grid advancements will apply digital technologies to the grid, and enable realtime coordination of information from generation supply resources, demand 

resources, and distributed energy resources (DER). This will bring new efficiencies to 

the electric system through improved communication and coordination between 

utilities and with the grid, which will translate into savings in the provision of 

electric service. Ultimately the smart grid will facilitate consumer transactions and 

allow consumers to better manage their electric energy costs.16

In recognition of this linkage, the actions identified in the National Action Plan are designed 

to be consistent, and in coordination, with smart grid policies implemented at the federal, 

state, and local levels. Furthermore, as discussed in Part 2, the National Action Plan calls for

developing terminology and messages that emphasize smart energy use, and not artificially 

separating smart grid actions from demand response actions. 

 

15 Time-of-use rates are not dynamic (because the rates for each time period are fixed and do not 

change with system conditions) and were not included in the National Assessment as a demand 

response program. However, they are being included here as an element of the expanded array of 

opportunities for customers to reduce demand in response to signals.

16 Smart Grid Policy, Proposed Policy Statement and Action Plan, 126 FERC ¶ 61,253, at P 1 (2009). 
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The Geography of Demand Response

To understand the objectives of the National Action Plan, it is useful to review the current 

state of demand response in the United States and identify the regions where there are 

opportunities for growth. Such information is contained in the National Assessment, which 

found that existing demand response programs in the United States have the capacity to offset 

four percent of current U.S. peak demand.17 The existing programs are mostly reliabilitydriven programs — e.g., direct control of end-use loads such as residential air conditioning 

and curtailable and interruptible rates for large commercial and industrial customers.18

There is considerable geographical variation in the amount of existing demand response. This 

variation is driven by several factors, including the rate of load growth, the cost of avoided 

capacity, and the regulatory disposition at the state level toward demand-side programs. 

Some areas, such as California, Florida, and New England, have significant demand response 

activity; others, such as Alaska, Montana, and Wyoming, have little.

 These 

programs have been in place for decades.

19

If the current level of demand response is preserved through the next decade, the National 

Assessment estimates that demand response would shave 38,000 megawatts (MW) off U.S. 

peak demand in the year 2019.20 If the existing mix of programs were to expand 

geographically to include regions that currently have little demand response activity and if 

customer participation rates in every region were to reach the levels representing today’s best 

industry practices, the potential impact of demand response programs would be significantly 

higher, reaching 82,000 MW, or nine percent of U.S. peak demand.21

Indeed, an even more diverse approach to demand response might be pursued in the future. 

In October 2009, the U.S. Department of Energy (DOE) issued 100 awards totaling $3.4 

billion to stimulate the development of the smart grid.22

Dynamic pricing has relatively little market penetration today. In 40 of the 50 states (plus the 

District of Columbia), the National Assessment found that dynamic pricing currently has

little to no influence.

 The awards, chosen from a list of 

some 400 proposals, encompass a variety of projects. Some of these projects use demand 

response based on pricing concepts such as dynamic pricing.

23

 

17 National Assessment, supra note 6, at 27.

 Either dynamic pricing rates are not being offered in those states or 

18 FERC Staff, Assessment of Demand Response and Advanced Metering (2008), available at

http://www.ferc.gov/legal/staff-reports/12-08-demand-response.pdf. 

19 National Assessment, supra note 6, at 42–44.

20 Id. at 27. 

21 Id. 

22 Office of Electricity Delivery and Energy Reliability at DOE, Smart Grid Investment Grant Awards,

http://www.oe.energy.gov/recovery/1249.htm. 

23 The National Assessment provides a state-level analysis of demand response, including a snapshot of 

existing programs. The full set of results at the state level for 2009 through 2019 is contained within 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

6 Introduction

customer participation rates are too low to produce significant impacts. In 10 states, dynamic 

pricing is estimated to have an impact of one percent or less; in one state, it has an impact of 

around two percent. However, the National Assessment also found that, with greater 

inclusion of these price-based demand response programs in the mix of possible options, the 

total potential for demand response would be far greater. The total potential could range 

between 14 and 20 percent of peak demand, or 138,000 to 188,000 MW, depending on 

whether dynamic pricing was deployed on an opt-in basis or opt-out basis.24

This snapshot of the state of demand response leads to the conclusion that there is a 

significant gap between today’s levels of demand response and the total potential that resides 

in the full portfolio of cost-effective options. The clear challenge — and opportunity — is to 

establish a path forward for realizing this potential consistent with state and federal policies 

and regulations. 

 

The Objective of the National Action Plan

The National Action Plan aspires to meet the requirements specified in EISA: identify 

“requirements for technical assistance to States to allow them to maximize the amount of 

demand response resources that can be developed and deployed;” design and identify 

“requirements for implementation of a national communications program that includes 

broad-based customer education and support;” and develop or identify “analytical tools, 

information, model regulatory provisions, model contracts, and other support materials for 

use by customers, states, utilities, and demand response providers.”25

With respect to the first path, the National Action Plan seeks to identify technical assistance, 

communications strategies, and other tools to achieve deployment of the maximum amount 

of price-responsive demand response identified in the National Assessment. The focus of this 

path is driven by the results of the National Assessment, which modeled great potential for 

peak load reductions from price-driven demand response, such as retail dynamic pricing rate 

designs enabled through advanced metering. The success of these programs will require the 

approval and full partnership of state and local regulators.

 To achieve this

objective, the National Action Plan calls for two simultaneous, compatible paths of action: 1) 

enabling development of price-responsive demand response programs, products, technologies, 

and incentives and 2) facilitating market penetration of newly developing “smart grid” 

technologies and programs.

 

the model developed for the National Assessment, available at 

http://www.ferc.gov/industries/electric/indus-act/demand-response/NADR-model.xls.

24 Id. at 27.

25 EISA section 529.
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Introduction 7

Sidebar 1: Demand Response in Organized Markets 

During the past decade, demand response resources have significantly increased their 

market share in organized markets. FERC and the RTOs/ISOs themselves have acted to 

eliminate barriers to demand response participation in organized wholesale energy, 

capacity, and ancillary services markets, and to ensure that demand response resources 

that are technically capable of providing a service are treated comparably to supply 

resources offering the service. For example, demand response resources that are capable 

of providing reserves may participate in the day-ahead and real-time ancillary services 

markets in the Midwest ISO.1

 Furthermore, demand response resources may offer 

operating reserves and regulation service in the New York ISO, participate in the California 

ISO’s energy and ancillary services markets, and participate in PJM’s Reliability Pricing 

Model and ISO New England’s Forward Capacity Market. Appendix B provides a list of the

current opportunities for demand response resources to participate in RTO/ISO markets. 

As a means of supporting these initiatives, FERC issued Order No. 719 on October 17, 

2008. Through this order, the Commission sought to further address barriers to demand 

response participation in ISO and RTO markets. Among various reforms, Order No. 719 

required system operators to accept bids from qualified demand response resources to 

provide ancillary services, and eliminated deviation charges during system emergencies to 

buyers taking less energy in real time than purchased day-ahead.2

 Also, unless prohibited 

by state or local law, Order No. 719 permitted aggregators of retail customers to bid 

demand response on behalf of retail customers directly into the organized markets.3 

Presently, 31,695 MW of demand response are available in ISO and RTO markets, up from 

17,146 MW at the end of 2006. Such gains represent 6.6 percent of 2008 peak electricity 

demand within the regions combined.4

 Demand response capacity resources have nearly 

tripled in the New England ISO and PJM territories, and resources providing ancillary 

services accounted for more than 4,000 MW at the end of 2008. Such an infusion of 

demand response resources has aided in providing greater grid reliability, mitigation of 

generation market power, and an overall decline in fuel-adjusted power prices in organized 

wholesale markets.5

 Moreover, permitting aggregators of retail customers and other 

curtailment service providers to participate in organized wholesale markets facilitates 

greater involvement from customers such as universities, big-box retailers, and residential 

customers.

1 FERC Staff, Assessment of Demand Response and Advanced Metering, at 41 (2008), available at

http://www.ferc.gov/legal/staff-reports/12-08-demand-response.pdf.

2 Order No. 719, FERC Stats. & Regs. ¶ 31,281 at P 15.

3 Id.; Order No. 719-A, 128 FERC ¶ 61,059 at P 51. (On rehearing the Commission broadly affirmed 

its finding, but took a different approach with small utilities.)

4

 ISO/RTO Council, 2009 State of the Markets Report, at 26 (2009). 

5

 Id. at 18.
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8 Introduction

With respect to the second path, the National Action Plan sets forth technical assistance, 

communications strategies, and other tools to be used to develop and deploy emerging costeffective smart grid technologies and resources (such as dispatchable and automated demand 

response) that enable customers to respond to price or other signals. This includes 

development and deployment of dispatchable demand response as a versatile resource for a 

variety of applications besides lowering peak demand. Examples include automating demand 

response, using demand response to provide operating reserves and other ancillary services, 

and partnering demand response with wind generation and other variable resources when 

appropriate. 

These new and emerging technologies and applications offer benefits that go beyond those 

that would be derived from the potential estimates in the National Assessment. Further, 

these technologies can bring the benefits of demand response to all consumers. They also 

may be helpful by serving as a bridge or facilitating the transition to some form of retail rate 

design, such as dynamic pricing, for states that choose that path. Therefore, the National 

Action Plan builds on the successes of demand response initiatives by enabling dispatchable 

demand response (dispatchable to price and non-price directions) programs, products, 

technologies, and incentives; fostering the continued deployment of advanced metering 

initiatives (AMI) and dynamic pricing; employing competitive market forces to develop more 

customer demand response; and planning for the deployment of many innovative demand 

response applications that create greater consumer control over energy usage when they

create new cost-saving opportunities for consumers. If achieved, these developments should 

allow business and other customers to make better choices about consumption, which in turn 

may allow power markets to work better, lower costs, and may benefit the environment.

The National Action Plan is a plan for all parties with a stake in demand response. 

Stakeholders that have either started to design or already established demand response 

programs, as well as stakeholders that have an interest in demand response but have not 

established programs, can benefit from the National Action Plan. The need to appeal to 

consumers, states, utilities, and a broad range of stakeholders can be met through extensive 

involvement of these groups throughout the implementation of the National Action Plan.

Process for Developing the National Action Plan

EISA requires the development of the National Action Plan after “soliciting and accepting 

input and participation from a broad range of industry stakeholders, state regulatory utility 

commissioners, and non-governmental groups.”26 Also, the Commission is directed to “seek 

consensus where possible, and decide on optimum solutions to issues that defy consensus.”27

 

26 EISA section 529. 

 

As a result, the process for developing the National Action Plan was designed to gather

27 Id.
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Introduction 9

feedback from interested parties, and the final document reflects feedback from a broad range 

of industry stakeholders.

Specifically, development of the National Action Plan consisted of the following steps:

1. Review existing literature. To initiate the research process and avoid duplication of 

efforts, FERC staff reviewed the existing literature on demand response, national 

communications programs, and similar action plans in other areas and industries. 

The review produced a number of “lessons learned” from these programs. 

Additionally, this review identified a number of research gaps that have become the 

focus of some of the specific elements of the National Action Plan.

2. Conduct stakeholder outreach. In summer 2008, FERC staff initiated a year-long 

informal outreach effort involving a diverse group of stakeholders on possible 

elements of the National Action Plan that would meet the objectives of EISA. This 

outreach effort consisted of informal interviews with regulators, utilities, consumers, 

trade organizations, and other stakeholders. The feedback that was received 

through these efforts contributed to the Discussion Draft.

3. Develop the Discussion Draft. This document contained an overarching strategy for 

the National Action Plan, centered on the creation of a Coalition of stakeholders to 

steer the effort forward. It also discussed a wide range of possible tactical elements

that could be included in the National Action Plan. The Discussion Draft was 

designed to provide concrete ideas and information to which the various 

stakeholders could react and provide additional comments. It was made available 

for public comment when it was posted on the FERC website on October 28, 2009.

4. Hold a technical conference. As another means for gathering feedback on the 

Discussion Draft, FERC staff held a technical conference on November 19–20 in 

Washington, D.C. The first day of the conference consisted of two panel sessions. A 

dozen speakers drawn from different facets of the demand response community, 

including state regulatory utility commissioners and nongovernmental groups,

presented their views on the Discussion Draft. The next day, three breakout 

sessions (moderated by FERC staff) were held on specific elements of the Discussion 

Draft. The conference closed with a plenary session in which summaries of the 

breakout sessions were presented. The panel presentations and a summary 

discussion of the breakout sessions were publicly broadcast over the Internet.28

5. Gather written comments on the Discussion Draft. In addition to providing 

feedback at the technical conference, interested parties were encouraged to provide 

written comments. They filed comments reflecting many points of agreement and 

 

28 A transcript of this conference, along with materials provided by speakers, is available on the FERC 

website at http://www.ferc.gov/industries/electric/indus-act/demand-response.asp. 
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10 Introduction

some differing opinions.29

6. Develop Draft National Action Plan. FERC staff developed the Draft National 

Action Plan based on the Discussion Draft and the feedback received through the 

technical conference and written comments submitted following the technical 

conference. It was posted on the FERC website on March 11, for public comment. 

 Appendix C lists the organizations that commented 

during the technical conference or through written comments. 

7. Review filed written comments on the Draft National Action Plan. Interested 

persons provided written comments on the Draft National Action Plan. The filed 

comments indicated consensus in most areas and disagreement in some others. 

Appendix C lists the organizations that filed written comments to the FERC on the 

Draft National Action Plan. 

This final National Action Plan is the product of all these consensus-building activities.

Overview of Stakeholder Feedback

Those who filed comments, with few exceptions, were generally supportive of the Draft 

National Action Plan. In particular, commenters indicate broad support for the development 

of a Coalition to contribute to the implementation of the National Action Plan. Commenters 

also agree that cost-effectiveness should be a key consideration in the National Action Plan. 

Commenters generally support the message framework development activities under the 

national communications program, such as developing adaptable, consumer-friendly messages 

and linking demand response with other smart energy use principles. Submitted comments 

also reflect general agreement on the importance of conducting foundational market research. 

Additionally, commenters generally agree that the national communications program should 

supplement, and not supplant, existing local outreach efforts.

A number of commenters raised issues and expressed different views regarding funding of the 

National Action Plan. The National Association of State Utility Consumer Advocates 

(NASUCA) points out that the National Action Plan does not indicate the source of funding 

for many of the strategies and activities. The American Public Power Association (APPA) 

states that the federal government should fund the National Action Plan, whereas General 

Electric Energy (GE) recommends that the Commission identify non-federal funding sources 

for the initial phase of the National Action Plan. Wal-Mart comments that the Coalition 

members should not provide funding for the Coalition. The National Action Plan, based on 

these comments, leaves flexibility for funding from a variety of sources for each strategy and 

activity. 

 

29 These comments are available in Docket No. AD09-10, which is the docket for the National Action 

Plan on Demand Response.
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Introduction 11

The comments on both the Draft National Action Plan and on the Discussion Draft indicate a 

lack of consensus with regard to a demand response grant program. GE and Tendril both 

provided comments to the Draft National Action Plan strongly supporting the creation of 

such a program. The Demand Response Coordinating Committee (DRCC) stated that a grant 

program should be included as one among several options to provide financial support for 

demand response programs. In the comments on the Discussion Draft, the California Public 

Utilities Commission (CPUC); Tendril; To the Point; North America Power Producers, Ltd; 

Energy Curtailment Specialists; APPA; Peak Load Management Alliance (PLMA); Smart Grid 

Library; and the New York Public Service Commission expressed support for a grant program. 

In its Discussion Draft comments, the National Rural Electric Cooperative Association

(NRECA) stated that a grant program should not be a priority, and Occidental calls the grant 

proposal overly broad and recommends that grants be restricted to state regulatory 

commissions or energy agencies to enable them to obtain assistance necessary to facilitate 

design and implementation of demand response. The Public Utilities Commission of Ohio’s

(PUCO’s) Discussion Draft comments indicate support for a grant program with the caveat 

that PUCO does not support such a program if funding opportunities are intended to pass 

through states, because many states are not well structured for grant distribution. Because 

the majority of comments filed in response to the Discussion Draft and the Draft National 

Action Plan favor the creation of a demand response grant program, the National Action Plan 

states that the Coalition should strive to establish such a program, to the extent that the 

Administration, Congress, and/or private actors decide to make funds available for such a 

program. 

Stakeholders also express divergent views on having two simultaneous, compatible paths of 

action, as called for in the Draft National Action Plan: 1) enabling price-responsive demand 

response and 2) facilitating market penetration of newly developing “smart grid” technologies 

and programs. Both ISO-New England and Wal-Mart support both paths of action. On the 

other hand, APPA argues that having two paths gives undue weight to smart grid technology, 

while the Maryland Public Service Commission (Maryland PSC) suggests not explicitly 

identifying price-responsive demand response as one of the two primary paths, because it is 

difficult to quantify. Maryland PSC also states that the Draft National Action Plan may be 

prejudging the value of price-responsive demand response before its cost-effectiveness has 

been fully evaluated and that the Draft National Action Plan overlooks conflict between 

wholesale and retail jurisdiction, even though price-responsive demand response hinges 

largely on deployment of advanced metering initiatives at the retail level. NASUCA 

comments that the paths of action should maximize the value of cost-effective demand 

response for consumers. The National Action Plan maintains the two paths of action and 

emphasizes that both paths take into the account the importance of cost-effectiveness. 

Commenters disagree on the role and composition of the Coalition proposed in the draft 

National Action Plan. APPA supports the draft’s approach regarding the Coalition’s role to 

provide input and support to a federal agency implementing the National Action Plan. Xcel 

states that it is in favor of a Coalition assisting the federal government in implementing the 
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National Action Plan, but voices its concerns about the effectiveness of a Coalition. In 

contrast to the approach provided in the draft, the DRCC, the Demand Response and Smart 

Grid Coalition (DRSG), ISO-New England, National Grid, and San Diego Gas & Electric 

comment that the Coalition should play the lead role in implementation of the National 

Action Plan. 

Though commenters disagree on the role of the Coalition, DRCC, DRSG, and Ice Energy each 

support forming a coalition of coalitions. DRCC states that it has already begun to form a 

coalition of coalitions, and National Grid states that the DRCC already provides a national 

forum for stakeholders and would be an appropriate candidate to serve as a Coalition leader. 

Edison Electric Institute (EEI) and Southern Company state that the National Action Plan 

should implement a decentralized approach whereby several regional coalitions are created to 

develop and oversee execution of a demand response strategy. 

In light of these comments expressing various thoughtful views, the National Action Plan has 

been revised so that Coalition members, collectively or individually, would implement 

various National Action Plan activities. It provides that responsibility for particular activities 

would be determined and coordinated through Coalition discussions. The Coalition would 

provide an opportunity for stakeholders to share insights and experiences and to identify 

common goals, areas of mutual concern or need, and current gaps. 

Commenters voice differing opinions on the Coalition’s composition. New York 

Transmission Owners (NYTO) argues that the Coalition should be made up of a broad group 

of organizations representing a variety of interests and regions. NASUCA emphasizes that the 

Commission should ensure that the consumer voice is represented in the Coalition and states 

that the voluntary nature of the Coalition and the number of individuals involved could lead 

to organizational problems. Xcel states that Coalition membership should be limited so that 

the Coalition will be an effective liaison between the federal agency and stakeholders, and 

states that its membership should include those with qualitative/technical expertise and those 

with policy/regulatory expertise. Because of the need to involve all stakeholders, the 

National Action Plan provides that the Coalition will be composed of volunteers who 

represent federal, state, and local governments; utilities; load-serving entities; and other 

demand response providers, RTOs and ISOs, commercial and industrial customers, consumer 

advocacy organizations, demand response coalitions, and other interest groups.

There is no consensus among commenters regarding the role of the federal government. 

Several commenters state that the federal agency should oversee, support, advise, and 

facilitate Coalition implementation of the National Action Plan. San Diego Gas & Electric

(SDG&E), on the other hand, voices concern that the draft envisions too large a role for a 

federal agency. Despite such concerns, commenters state that DOE is the logical and 

appropriate federal agency to be involved in the National Action Plan’s implementation. 

After consideration of the comments, the National Action Plan now states that one or more
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Introduction 13

federal agencies will be part of the Coalition, and have a unique role, but not necessarily a 

lead role, in implementation of the National Action Plan. 

At least one commenter disagrees with some of the Draft National Action Plan’s strategies 

and activities related to technical assistance to states. The CPUC suggests that there might be 

no need for the Coalition to provide technical advice to states, because private organizations 

can do so through state and local proceedings. The Illinois Commerce Commission, along 

with several others, believes technical assistance to states is critical, however. The National 

Action Plan retains these actions for technical assistance to states in part because it is a clear 

statutory requirement of EISA, as well as because of the strong support for efforts regarding 

technical assistance to states at the October technical conference and in written comments on 

the Discussion Draft.

Several commenters take opposing views on the need for a national educational campaign 

with a broad message on demand response as part of the national communications program. 

In filed comments responding to the Discussion Draft, Southern California Edison Company, 

Occidental, SDG&E, and Florida Power & Light voiced their opposition to the creation of a 

national demand response message communicating directly to the mass market. NASUCA 

and the NRECA expressed the view that a uniform national message would provide incorrect 

information to many consumers and could do more harm than good. NRECA, CPUC, and 

others also stated that a national message could override or confuse existing local 

communications programs that have succeeded in developing and promoting locally focused 

and locally appropriate demand response programs for consumers. Based on this input, the 

Draft National Action Plan proposed developing a research-based message framework, tools, 

and support materials that local demand response implementers can tailor to supplement or 

enhance their current communications efforts rather than providing a national demand 

response message. Wal-Mart, NRECA, and APPA support the message framework approach 

taken in the national communications program section as envisioned in the Draft National 

Action Plan. EnerNOC’s comments to the Draft National Action Plan point out that a 

blanket advertising campaign at the national level would not be realistic given the variation 

among states, regions, and customers.

However, in its response to the Draft National Action Plan, DRCC comments that the final 

plan should include a comprehensive communications component that attempts to undertake 

high-level awareness and educational communications in addition to efforts that support local 

communications. This recommendation conflicts with comments received in response to the 

Discussion Draft. EEI also supports broad-based national public education messages, but 

states that national messages should not supplant the communications efforts from local or 

regional level program providers to end-use customers. Because of the broad, but nonunanimous opposition to national messages, the National Action Plan retains the researchbased message framework approach whereby the national communications program would 
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14 Introduction

provide to local demand response implementers30

During the November 2009 staff technical conference, several stakeholders emphasized the 

importance of outreach to commercial and industrial customers. Hess supported broad 

communications to commercial and industrial customers stating that these customers will 

deliver the most impact early in the National Action Plan. Alcoa stated that large industrial

customers can potentially deliver large amounts of demand response. PLMA also stated that 

the commercial and industrial sector is capable of substantial demand response contributions 

and suggested facilitating their participation through educational support and coordinating 

outreach with existing delivery channels. However, several commenters on the Draft 

National Action Plan, such as American Electric Power, the CPUC, EEI, Southern Company, 

and SDG&E, argue against direct communications with large commercial and industrial 

customers as part of the national communications program. The National Action Plan retains 

the outreach and support materials effort to large commercial and industrial customers that is 

needed to develop the large demand response potential of this unique customer class. 

However, to reflect commenters’ concerns, the National Action Plan calls for the Coalition to 

coordinate outreach to these customers, removes the role of a federal agency in overseeing 

outreach to these customers, and focuses the outreach on providing general information and 

support materials. 

communications tools, support, and advice 

that local demand response implementers can then adapt to their needs. 

The comments reflect some difference of views regarding the development of tools for enduse customers. DRCC believes that it is unlikely that tools will need to be developed for enduse customers, because private sector innovation is currently addressing this need. National 

Grid states that there is a need for additional tools for customers to use in analyzing and 

implementing demand response programs. Because of the EISA requirement to identify and 

develop such tools and materials as well as the large untapped national potential for demand 

response by end-use customers and the widespread belief by many stakeholders that better 

tools are needed to facilitate their participation in demand response programs, the National 

Action Plan provides for the development of such tools.

 

30 Local demand response implementers are entities, such as state or local governing officials, utilities, 

load-serving entities, and other demand response providers, interested in providing demand response 

programs, services, rates, incentives, etc., at a local level. 
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Introduction 15

Structure of the National Action Plan

The rest of the National Action Plan is divided into two main parts. 

Part 1 provides an overview of the strategic vision of the National Action Plan. It begins with 

a description of the Coalition-based approach as the framework for implementing the 

elements of the National Action Plan. It then describes basic principles of the Coalition. 

Finally, Part 1 presents case studies of how the Coalition approach has succeeded in other 

applications. 

Part 2 sets out the elements of the National Action Plan. These actions are organized into 

three categories: technical assistance to states; the national communications program; and 

development or identification of tools and materials for use by customers, states, and demand 

response providers. 

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Part 1: Strategic Vision of the National Action Plan 17

P ART 1:

Strategic Vision of the 

National Action Plan 

1.1 The Coalition

his National Action Plan calls for the formation of a Coalition to coordinate the 

implementation of the National Action Plan. Coalitions represent a way to harness the 

collective energy of a variety of individual organizations, yielding outcomes that have greater 

reach and depth than those organizations would achieve acting individually. The Coalition 

would coordinate and combine the efforts of state/local governing officials, utilities/loadserving entities, RTOs/ISOs, consumer advocates, commercial/industrial customers, the 

federal government, existing coalitions, and other stakeholders with respect to the strategies 

and activities described in the National Action Plan.

Why Should a Coalition Be Involved in Implementing the National 

Action Plan?

The process of generating electricity and delivering it to end-use customers is complex; varies 

by locality, state, and region; and involves many different actors and interests. Likewise, how 

demand response is used today also varies greatly by locality, state, and region. For example, 

some demand response is utilized through regional wholesale markets and programs, and 

some demand response is operated at the retail electricity level, through programs that are 

under the jurisdiction of and overseen by state regulators or locally appointed or elected 

governing boards for publicly and cooperatively owned electric utilities. These differences 

should be acknowledged so that the framework of the National Action Plan is inclusive and 

can be tailored to each locality, state, and region.

Encouraging the participation of local, state, and federal government actors as well as 

utilities/load-serving entities, demand response providers, RTOs/ISOs, and customers 

(industrial, commercial, and residential customers) will help ensure that the National Action 

Plan reflects regional differences and taps into the expertise and experience of various groups. 

A Coalition will give these stakeholders an opportunity to work together to build support for 

a comprehensive national strategy and ensure its success.

T
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18 Part 1: Strategic Vision of the National Action Plan

Who Should Be Involved?

For the effort to be a success, the Coalition should be composed of volunteers from:

• Federal, state, and local governments

• Utilities, load-serving entities, and other demand response providers

• RTOs/ISOs

• Commercial and industrial customers

• Consumer advocates

• Existing coalitions

• Interest groups and other stakeholders

What Elements Make a Coalition Successful?

There are many factors that help a Coalition succeed:

1. Clear goals. The Coalition stakeholders need to have a clear understanding and 

agreement on the goals they are trying to meet. 

2. A clear organizational structure. Stakeholders of the Coalition need to understand 

how decisions are made, how work will be completed, and how accountability for 

achieving the goals of the National Action Plan will be measured. 

3. Good leadership. An effective Coalition is composed of effective volunteers and, 

depending on the nature of the work, strong guides who provide assistance and 

direction to help the volunteers achieve their goals.

a. Effective volunteers. First and foremost, stakeholders should be cooperative 

and support the National Action Plan goals. These stakeholders should be

leaders who are empowered to make decisions for their respective 

organizations. They also must have time to commit to the responsibilities of 

the Coalition.31

b. Effective volunteer leaders. A smaller subset of stakeholders who are wellversed in working with other volunteers and are willing to provide leadership 

to the overall Coalition. 

 

 

31 Larry Cohen et al., Developing Effective Coalitions: An Eight Step Guide, in Community Health 

Education & Promotion: A Guide to Program Design and Evaluation, 144-161 (Mary Ellen Wurzbach 

ed., 2d ed. 2002). 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Part 1: Strategic Vision of the National Action Plan 19

c. Assistance and support. Given that stakeholders will be volunteering their 

time, it may be important to have an entity or a federal agency (for example, 

FERC and/or DOE) observe the progress of both federal and private efforts to 

complete the National Action Plan activities, ease implementation by tracking 

these efforts, be aware of any gaps in implementation, and, where appropriate,

encourage and work with federal and/or private actors to fill the gaps. 

4. Funding. Each stakeholder will fund its own participation in the Coalition. 

Under the National Action Plan, the Coalition would be established with the participation of 

all stakeholders. The Coalition could be established under a number of different scenarios. 

For example, part of the National Forum could be dedicated to identifying an organizational 

structure for the Coalition. Whatever means is chosen to establish a Coalition, stakeholders 

should consider leveraging the experience of existing coalitions to determine an appropriate 

format for collaborating on the activities identified in the National Action Plan.

How Should the Coalition Operate?

The Coalition would serve as a forum for its stakeholders to coordinate implementation of the 

National Action Plan. While each stakeholder in the Coalition would be responsible for 

implementing particular activities identified in the National Action Plan, the Coalition would 

provide an opportunity for these entities to share insights, experiences, current gaps, and 

areas of mutual concern or need and agree on coordinated strategies. 

Under the National Action Plan, one or more federal agencies participating in the Coalition

(for example, DOE where appropriate) would direct and perhaps also fund implementation of 

certain identified activities of the National Action Plan that it chooses to fund. Activities 

identified in the National Action Plan that lend themselves to being accomplished by private 

entities would be accomplished using private funding. Existing coalitions could share their 

expertise and may be able to provide long-term support and leadership for the Coalition. The 

work of these private entities would be coordinated with that of federal agencies through the 

Coalition to the extent practical and legally permitted. This would help ensure that the 

efforts of governing officials, utilities/load-serving entities, RTOs/ISOs, demand response 

providers, consumer advocates, commercial/industrial customers, and other stakeholders are 

leveraged and/or enhanced. 

In addition, it also could be useful for a federal agency (for example, FERC and/or DOE) to 

observe the progress of both federal and private efforts to complete the National Action Plan 

activities, ease implementation by tracking these efforts, be aware of any gaps in 

implementation and, where appropriate, encourage and work with federal and/or private

actors to fill the gaps.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

20 Part 1: Strategic Vision of the National Action Plan

1.2 Examples of the Coalition Approach

The use of a Coalition has been successful in similar national efforts. Two examples, differing 

in objectives and approach, illustrate the Coalition approach to communicating the benefits 

and opportunities for demand response and to developing the methods and tools that states, 

utilities, demand response providers, and others involved find useful and beneficial to 

consumers. Appendix A contains more information on these two examples.

The National Action Plan for Energy Efficiency

In 2006, a Leadership Group composed of more than 50 leading electric and gas utilities, state 

utility commissioners, state air and energy agencies, energy service providers, energy 

consumers, and energy efficiency and consumer advocates released the National Action Plan 

for Energy Efficiency.32 This report is a call to action to increase investment in ratepayerfunded energy efficiency; it lays out five main policy recommendations to achieve greater 

investment from sponsoring organizations. The Leadership Group then called for 

development of a set of resource materials, largely best practices based on the last two decades 

of experiences in implementing ratepayer-funded energy efficiency, for parties who are 

interested in pursuing ratepayer-financed energy efficiency. In 2008, the National Action 

Plan for Energy Efficiency was updated with the Vision for 2025,33

The initial Leadership Group was co-chaired by the then-president of the National 

Association of Regulatory Utility Commissioners (NARUC), Diane Munns, and the President 

and Chief Executive Officer of Duke Energy, James Rogers. DOE and U.S. Environmental 

Protection Agency (EPA) participation in the Leadership Group is limited to facilitation. As 

of January 2010, more than 120 organizations have endorsed the National Action Plan for 

Energy Efficiency recommendations and/or made commitments to promote energy efficiency 

within their spheres of influence. The Leadership Group and its National Action Plan for 

Energy Efficiency ended its activities in November 2009, after having achieved its original 

purpose of serving to draw member attention to energy efficiency.

which identifies 10 

implementation goals and measures the progress made so far. Recently, the Leadership Group 

sponsored a report to explore the coordination of demand response and energy efficiency, 

which is described in Sidebar 2. 

 

32 National Action Plan for Energy Efficiency, National Action Plan for Energy Efficiency (2006), available 

at http://www.epa.gov/cleanenergy/documents/napee/napee_report.pdf. 

33 National Action Plan for Energy Efficiency, National Action Plan for Energy Efficiency Vision for 2025: A 

Framework for Change, at ES-1 (2008), available at 

http://www.epa.gov/cleanenergy/documents/vision.pdf. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Part 1: Strategic Vision of the National Action Plan 21

Sidebar 2: Coordination of Energy Efficiency and Demand Response

In support of the 10 implementation goals outlined in the National Action Plan for Energy 

Efficiency’s Vision for 2025,

1 the National Action Plan for Energy Efficiency, with input from 

the Leadership Group, released a paper discussing the coordination of energy efficiency and 

demand response in January 2010.2

 The paper defines energy efficiency as “using less 

energy to provide the same or improved level of service to the energy consumer in an 

economically efficient way.”3

 On the other hand, demand response “entails customers 

changing their normal consumption patterns in response to changes in the price of energy 

over time or to incentive payments designed to induce lower electricity use when prices are 

high or system reliability is in jeopardy.”4

 The paper also recognizes that energy efficiency 

and demand response currently have significant differences in how they are measured, 

what organizations offer them, how they are delivered to customers, and how they are 

rewarded in the marketplace. In order to reduce these differences and achieve possible 

benefits, the paper outlines ways in which energy efficiency and demand response can be 

coordinated. It discusses the concerns and barriers affecting the coordination of energy 

efficiency and demand response, and articulates steps that can be taken to achieve better 

coordination. 

Energy efficiency and demand response programs are rarely combined into an integrated 

program. The paper states that “in December 2009, out of 2,016 U.S. and Canadian 

energy efficiency, demand response, and load management programs in the E Source 

database, only 56 were identified as serving both energy efficiency and demand response 

purposes.”5

 Therefore, one way in which to better coordinate energy efficiency and 

demand response is to offer combined offerings in the future. Even if energy efficiency and 

demand response programs are not combined, program sponsors could provide marketing 

and education on these programs in a more unified way. Furthermore, both private firms, 

via finding customers interested in reducing their energy costs, and the government, via 

building codes and appliance standards, can contribute to the simultaneous achievement of 

energy efficiency and demand response goals.

Nevertheless, the integration of energy efficiency and demand response programs remains 

a difficult and complex endeavor for several reasons. First, the funding for energy 

efficiency and demand response can sometimes come from different sources. Second, 

some energy efficiency managers have expressed reservations about demand response 

interfering with their programmatic goals. Third, retail rates need to be designed with 

energy efficiency and demand response objectives in mind — i.e., dynamic or time-varying 

rates may be best offered with inclining block rates. Finally, it will take time to develop the 

capabilities of utility staff and contractors in both energy efficiency and demand response.

The paper states that many actions can be taken in order to encourage better coordination 

of energy efficiency and demand response. Examples include clear regulatory signals that 

encourage utilities and grid operators to coordinate energy efficiency and demand response 

activities, better articulated demand-side management program goals that target both 

energy savings (energy efficiency) and peak demand reductions (demand response), and a 

new set of consumer education activities that simultaneously explicate energy efficiency 

and demand response benefits.

1 National Action Plan for Energy Efficiency, supra note 28.

2 National Action Plan for Energy Efficiency, Coordination of Energy Efficiency and Demand 

Response (2010) (Prepared by Charles Goldman (Lawrence Berkeley National Laboratory), Michael 

Reid (E Source), Roger Levy, and Alison Silverstein), available at www.epa.gov/eeactionplan.

3 Id. at ES-1.

4 Id.

5 Id. at ES-3.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

22 Part 1: Strategic Vision of the National Action Plan

The Air Bag and Seat Belt Safety Campaign

In 1993, General Motors and the National Safety Council formed the Air Bag and Seat Belt 

Safety Campaign, a coalition of automobile manufacturers, insurance companies, the 

Insurance Institute for Highway Safety, safety organizations, law enforcement associations, 

and the National Highway Traffic Safety Administration, to address the issue of child air bag 

deaths and stagnant nationwide seat belt use.34

As a result of the Air Bag and Seat Belt Safety Campaign’s work in demonstration states and 

then nationwide, seat belt use increased more than it ever had during a prior period, from 61 

percent in 1996 to a record high of 82 percent in 2005.

 They conducted a national umbrella 

campaign to encourage parents to restrain their children properly in the back seat, and to 

encourage all drivers and passengers to buckle up. This campaign also provided media and 

organizational outreach materials to states and communities so that they were well prepared 

to serve as spokespeople for the effort even if they were not demonstration program states. 

35 Child fatalities from traffic crashes 

dropped by 20 percent, and proper restraint use among toddlers jumped dramatically from 60 

to 94 percent.36 

 

34 For more information about the Air Bag and Seat Belt Safety Campaign, visit 

http://www2.nsc.org/airbag.htm. General Motors and the Insurance Institute for Highway Safety 

provided the primary funding.

35 National Safety Council, National Safety Council Honors Air Bag and Seat Belt Safety Campaign for 

Lifesaving Achievements (2006), available at http://www.csrwire.com/press/press_release/18157-

National-Safety-Council-Honors-Air-Bag-and-Seat-Belt-Safety-Campaign-for-LifesavingAchievements. 

36 National Safety Council, Welcome to the Air Bag & Seat Belt Campaign (2004), available at

http://www2.nsc.org/airbag.htm.
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Part 2: Strategies and Activities 23

PART 2:

Strategies and Activities 

his section sets out a number of strategies and activities that will be pursued through the 

National Action Plan to fulfill the objectives in EISA section 529.

The activities are organized into three categories: technical assistance to states, the national 

communications program, and development or identification of tools and materials for use by 

customers, states, and demand response providers. However, there will be significant, 

inherent overlap between these categories of activity. Requirements for tools and materials 

can be developed and coordinated at the same time as requirements for technical assistance 

and the national communications plan. Similarly, providing messages and talking points to 

states that implement demand response would be a component both of the communications 

program and of technical assistance to states. For the sake of simplicity, action items are 

listed under the statutory objective areas that are most closely related to each activity. Figure 

1 illustrates the functional overlap between the three activity areas.

Figure 1: Functional Overlap in Some National Action Plan Activities 

Given the overlap in technical assistance and tools and materials, we anticipate that not only 

states but also customers, utilities, demand response providers, and other bodies and 

institutions will be able to take advantage of the resources identified in the National Action 

Plan. It should be noted that the degree to which all elements of the National Action Plan 

are developed is heavily dependent on the level of funding and organization that the 

Coalition achieves. The options presented in the following sections could be pursued more or 

less aggressively than as they are currently described, depending on how these factors unfold 

in the implementation phase of the National Action Plan.

To meet the three objectives in EISA, the National Action Plan will be applicable to a wide 

range of demand response programs, products, and technologies, and it also will be applicable 

to various stages of development and deployment of demand response implementation. 

T
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

24 Part 2: Strategies and Activities

2.1 Technical Assistance to States

Introduction

Section 529 of EISA requires that the National Action Plan identify what technical 

assistance37

In many states, a variety of entities are already providing demand response resources. (See 

Appendix B for examples.) These states tend to be those that have passed laws and/or 

regulatory mandates or action plans that incorporate demand response in the energy policy 

formation process. Often, these states (for example, Connecticut) have laid out a framework 

for integrated resource planning that explicitly incorporates demand response as a resource.

states need to maximize the amount of demand response resources that can be 

developed and deployed. For the purposes of this National Action Plan, targets for state 

assistance include governors, state regulators, state energy offices, state legislators, and state 

consumer advocates. While the statute requires the National Action Plan to identify “the 

requirements for technical assistance to States,” demand response activities of publicly owned 

and cooperatively owned utilities do not generally fall under state commission jurisdiction. 

Thus, providing technical assistance only to state agencies will not achieve the goals of 

providing assistance to all governing bodies responsible for overseeing the provision of 

electric service to all customers. Local officials governing publicly owned and cooperatively

owned utilities face challenges similar to those of state governing officials. Therefore, this 

section’s discussion of most types of technical assistance is geared toward the needs of state 

and local governing officials.

38

Several states have taken regulatory or legislative actions to encourage demand response and 

energy efficiency.

 

In some states, RTOs and ISOs operate organized energy and capacity markets into which 

demand response can be bid as a resource. Appendix B also lists current opportunities for 

demand response to participate in RTO/ISO markets.

39 For example, the Michigan Public Service Commission’s Michigan’s 21st

Century Energy Plan40 and the New Jersey Board of Public Utilities’ Energy Master Plan41 set 

forth targets to reduce energy consumption and peak demand for the utilities and/or loadserving entities operating in those states. Massachusetts’ Green Communities Act,42

 

37 FERC staff defines technical assistance to include, for example, the provision of information, 

supporting research, funding, and onsite assistance. 

38 Conn. Gen. Stat. § 16a-3a (2008).

39 For example, see FERC Staff, 2009 Assessment of Demand Response & Advanced Metering, at 12 

(2009) (identifying the steps that states have taken to encourage demand response, such as 

Pennsylvania, Maryland, New York, New Mexico, Ohio, and Iowa’s adoption or enhancement of energy 

efficiency resource standards that include demand response).

40 JP Lark, Michigan’s 21st Century Electric Energy Plan (2007), available at

http://www.michigan.gov/documents/mpsc/21stcenturyenergyplan_185274_7.pdf. 

41 New Jersey Board of Public Utilities, New Jersey Energy Master Plan (2008), available at

http://www.state.nj.us/emp/docs/pdf/081022_emp.pdf. 

42 2008 Mass. Acts 50 (amending Mass. Gen. Laws ch. 164B, § 116(a) (2009)).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Part 2: Strategies and Activities 25

Maryland’s EmPOWER Maryland Energy Efficiency Act of 2009,43 and Pennsylvania’s Act 

12944 set goals for reductions in energy consumption and peak demand. In Colorado, the 

legislature recently passed legislation that permits cooperative electric associations to 

introduce inclining block rates for residential customers to promote energy efficiency.45 In 

Iowa, utilities are required to develop energy efficiency programs,46 which include demand 

response.47

Many state and local governing officials and other key stakeholders (such as other demand 

response providers and public power entities, including rural cooperatives and publicly

owned utilities) recognize the potential benefits of demand response programs, products, 

technologies, and incentives and would like to increase participation and expand their 

deployment.

 

48

Several organizations, such as load-serving entities, RTOs/ISOs, and other demand response 

providers, are developing ways to enable demand response to be utilized more broadly as a 

resource in energy, capacity, and ancillary services markets. These novel approaches will also 

help foster the full deployment of AMI and dynamic pricing. In addition, they will release 

competitive market forces to 1) develop more customer demand response and 2) plan for the 

deployment of many innovative demand response applications that create greater consumer 

control over energy usage and create new cost-saving opportunities for consumers. 

 However, as discussed at the FERC staff technical conference on November 

19–20, 2009, inadequate training, time constraints, and staffing or resource limitations can 

impede effective implementation and deployment of demand response programs. While 

wholesale markets are seeing increasing participation by providers of demand response 

resources, customers who participate in these programs are primarily in the commercial and 

industrial sectors and represent a relatively small fraction of all retail customers.

 

43 2008 Md. Laws 131 (amending MD Code Ann., Pub. Util. Cos. § 7-211(b)(2) (2009)).

44 2008 Pa. Laws 129 (amending 66 Pa. Cons. Stat. § 2806.1 (2009)).

45 S. 39, 67th Gen. Assem., Reg. Sess. (Co. 2009) (amending Colo. Rev. Stat. § 40-9.5-106(2)). (“A 

cooperative electric association...establishes a graduated rate for increased energy consumption, for 

energy conservation and energy efficiency purposes, by residential customers that is revenue-neutral 

for the class...[and] shall give due consideration to the impact of such rates on low-income 

customers.”)

46 Iowa Code § 476.6.16 (2009). See Iowa Utilities Board, Energy Efficiency in Iowa’s Electric and 

Natural Gas Sectors, Report to the Iowa General Assembly (2009); Iowa Utilities Board, Overview of 

Energy Efficiency Plans and Programs in Iowa (2009),

http://www.state.ia.us/government/com/util/energy/energy_efficiency.html. 

47 “Energy efficiency programs include activities which lessen the amount of heating, cooling, or other 

forms of work which must be performed, including but not limited to...direct and indirect load control, 

time-of-use rates...,” Iowa Code § 476.6.16(c)(2) (2009) (existing code amended in 2008).

48 Several states have already implemented demand response programs, from which useful lessons can 

be drawn. Appendix C discusses specific case studies of demand response programs and policies in 

various states and regions.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

26 Part 2: Strategies and Activities

Technical Assistance Actions

Section 529 of EISA requires that the National Action Plan identify the requirements for 

technical assistance to states. Assistance to other entities — such as utility and non-utility 

demand response providers and consumers — is discussed in Sections 2.2 and 2.3 of this 

document. The overall goal of technical assistance is to provide high-quality information and 

research to states. States will use this information to make decisions regarding demand 

response policy, regulation, and investments. Technical assistance can be provided by private 

entities or by federal agencies. For instance, DOE currently gives states assistance that is 

related to demand response as one of its many state electricity topics.

Establish a National Forum

Purpose Give federal, state, and local leaders, as well as key stakeholders, a venue to 

introduce the National Action Plan.

Expected 

Outcome

Awareness of and support from policymakers for accomplishing the activities 

identified in the National Action Plan. 

As the first step in providing technical assistance under the National Action Plan, a federal 

agency will sponsor a national forum on demand response that would be held for federal 

agencies, state public utility commissioners, state energy offices, gubernatorial offices, state 

legislators, state consumer counsels, utilities, other key stakeholders, and interested 

consumers. Such a forum would provide a useful opportunity for the Coalition, to present the 

overall vision of the National Action Plan to key decision-makers on demand response. The 

national forum also would provide an opportunity to share ideas, examine barriers, and 

explore solutions. Part of the National Forum could also be dedicated to developing an 

organizational structure and leadership for the Coalition.49

The forum would be a stand-alone, one-day session, likely in Washington, D.C., or following

another national conference (e.g., a meeting of NARUC). The forum also could be integrated 

with existing third-party forums and meetings on demand response to leverage existing 

infrastructure, marketing, and name recognition to attract broad participation. The national 

forum also could take a blended approach that allows for in-person participation as well as 

online participation, e.g., webcasting to reach the widest possible audience. 

 

After the initial national forum, the Coalition would promote and develop a series of annual 

meetings. The purpose of these meetings should be to review results that have been achieved, 

share information on the latest developments in demand response, and continue the provision 

of targeted assistance to states as needed. If annual meetings are determined to be useful, the 

locations of these national meetings could rotate between regions (e.g., East Coast, Midwest, 

West Coast) to foster greater in-person participation. If the forum is held once per year, the 

 

49 Such a national forum on demand response was jointly conducted by FERC and DOE in February 

2002.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Part 2: Strategies and Activities 27

ideal time would be in the fall, when the results of summer demand response efforts would be 

known. The forum would run no longer than two days. In addition, to maximize 

participation, these meetings should be designed as webinars to encourage broad 

participation. 

Conduct Informational and Educational Sessions for Policymakers and 

Regulators 

Purpose For state and federal regulators, legislators, and other policymakers to share 

and learn about the attributes, uses, costs, and benefits of effective demand 

response and opportunities to implement demand response.

Expected 

Outcome

State and local governing officials are better prepared to implement demand 

response. 

Following the national forum, multiple regional and state sessions should be held, targeted to 

a broader set of state employees, regulators, and other stakeholders. Regional and state 

sessions may be more convenient for other interested retail regulators such as city councils 

and rural cooperative boards. The objectives of the regional sessions would include those of 

the national forum but also should seek to coordinate and implement applicable activities 

proposed in the National Action Plan for the deployment of demand response in the region. 

In addition, these regional and state sessions would be coordinated with existing regional 

dialogues (e.g., efforts in the Midwest, Mid-Atlantic, and Pacific Northwest) funded by DOE 

at the request of the states. 

Regional sessions would allow more targeted discussion and input from state officials and 

local utilities on demand response issues specific to each region — for example, demand 

resource participation in wholesale organized markets in regions served by RTOs or ISOs, and 

use of demand response to meet ancillary service needs associated with integration of 

renewables. The sessions could address the various services provided by demand response 

and the associated costs and potential benefits of demand response programs, products, 

technologies, and incentives to the states and their electric customers. These sessions also 

could help stakeholders develop strategies for deployment. 

It is expected that the informational and educational sessions should promote knowledge and 

skills related to:

• The various services provided to enable demand response. 

• The associated costs and potential benefits of demand response programs.

• Products, technologies, and incentives available to states and their electric 

customers. 

• Strategies for deployment.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

28 Part 2: Strategies and Activities

• Practical aspects of demand response implementation.

• Just-in-time results and best practices from demand response implementation.

• Relationship of demand response to the smart grid and the deployment of smart 

meters. 

• Navigation of federal/state jurisdictional issues related to demand response.

The Coalition could sponsor these regional sessions and recruit speakers and facilitators for 

these sessions. In addition to conducting the workshops, these speakers and facilitators 

should be responsible for developing workshop materials and customizing these materials to 

address specific regional and state issues.

Examples: Informational Sessions

CPUC and California Institute for 

Energy and Environment

CPUC and the California Institute for Energy 

and Environment have developed a series of 

white papers on various behavioral topics 

and conducted two-hour webinars to present 

the papers and discuss the results. CPUC 

funds the working papers and the Institute 

selects the experts to prepare and present 

the papers. Papers and presentations are 

then posted to the Institute’s website.

http://uc-ciee.org/energyeff/energyeff.html

National Regulatory Research 

Institute 

The National Regulatory Research Institute 

provides education sessions for various 

topics, such as smart grid issues and 

dynamic pricing. Slide decks and 

information related to these presentations 

are posted to their website.

http://www.nrri2.org/
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Part 2: Strategies and Activities 29

Build a Panel of Demand Response Experts

Purpose Deliver lectures on and generate interest in demand response social and 

technical topics at national and regional conferences; consult on demand 

response programs and projects. 

Expected 

Outcome

Enhanced knowledge, skills, and attitudes of stakeholders regarding demand 

response programs; technologies; markets; statutes; and/or ordinances, 

benefits, and economics.

The Coalition would oversee the recruitment of experts to help inform various constituencies 

about demand response programs, products, technologies, and incentives and their benefits. 

These experts could be available as contacts for state and local governing officials during 

policy development or regulatory proceedings.50

The Coalition would establish an inventory of demand response industry technical experts. 

One means to manage this panel would be through a Web-searchable database through 

which states and other entities could identify a short list of experts for a specific topic. For 

example, a user could use this database to find someone with expertise related to customer 

education for small/medium commercial entities, or to find someone with expertise related to 

automated demand response in aluminum manufacturing facilities. 

 

The initial panel of experts could be developed by soliciting recommendations from the 

federal agency, as well as Coalition members, and by identifying experts who have spoken at 

industry conferences and published in relevant journals. Additional experts could then be 

identified through recommendations from existing panelists. All experts would need to 

disclose conflicts of interest, which is a best practice found in health-care-oriented 

conferences and coalitions such as the American Public Health Association. To encourage 

freedom of expression and diversity of thought, the messages communicated by experts

should flow freely. Therefore, the views presented by these experts should not be construed 

to represent the opinion or policy of the federal agency or the Coalition. 

The panel of experts could serve as a resource for state and local government officials as they 

consider demand response programs. The experts should provide information about the types 

of demand response programs and assist state and local government officials in assessing 

demand response. In addition, experts could be speakers at events. The Coalition could 

provide speakers through both “push” and “pull” methods. Push methods involve Coalition 

members proactively recommending a panelist to participate in an event. Pull methods 

reflect states or entities in need of panelists for events searching the panelist database 

themselves to identify experts for speaking engagements, or asking the Coalition or federal 

agency to recommend an appropriate expert. Regardless of the method, the entity sponsoring 

 

50 These activities would be funded by the Coalition or other private entities rather than the federal 

government.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

30 Part 2: Strategies and Activities

an event in which a panelist will participate would be responsible for selecting the 

appropriate panelists for their event. 

Sponsor Technical Papers

Purpose Generate new knowledge or synthesize existing knowledge to inform state 

officials about the design of demand response programs, products, 

technologies, incentives, markets, and legislation.

Expected 

Outcome

Peer-reviewed or similar-quality papers and their distribution through an online 

database with clear summaries/abstracts.

Technical knowledge about demand response is underdeveloped, underfunded, limited in 

scope, decentralized, disorganized, and in some cases proprietary and thus hidden from public 

view. There exists no peer-reviewed journal for demand response research, no online 

database of demand response research citations, and no shared agenda and prioritization for 

ongoing demand response research. Published research is generally limited to trade press 

(such as The Electricity Journal and Public Utilities Fortnightly), reports independently 

developed by utilities and research organizations, and peer-reviewed journals that are not 

specifically dedicated to demand-side issues (such as Energy, Energy Economics, Energy 

Policy, The Energy Journal, The Journal of Regulatory Economics, and Utilities Policy). 

Some state organizations such as the California Energy Commission’s Research, Development, 

and Demonstration Division (formerly the Public Interest Energy Research program) set 

research agendas, solicit proposals, and award funding (collected from public interest funds) 

for research.

To promote the development of technical knowledge about demand response, the Coalition 

would solicit information about the demand response topics that would possibly be helpful to 

state officials and would oversee the development of a series of informational, technical, 

research, or policy papers targeted to various practical aspects of demand response 

implementation for the use of state officials. These papers could be disseminated through the 

clearinghouse discussed in Section 2.3, though if the federal agency sponsors the 

clearinghouse, various standards on objectivity and public interest filters would be applied. 

Overall, the primary purpose of the technical papers would be to highlight and address 

questions that require new research to address barriers to demand response. 

The Coalition and its stakeholders would develop and prioritize topics of interest. The

Coalition and its stakeholders could solicit research proposals from national laboratories, 

academic institutions, utilities, independent researchers, consultants, and other entities. 

Subject to available funding, the Coalition or the federal agency may be able to award funding 

to proposals that have merit. If the federal government sponsors any technical papers 

identified by the Coalition, attention will focus on avoiding conflicts of interest, because 

members of the Coalition may have financial interests in the message developed. Proposal 

solicitation should embrace both primary (original) research and secondary (meta-analysistype) research, with an emphasis on the latter to bring forward existing proprietary research 
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commissioned by utilities. There also could be crossover between a demand response 

research agenda and an energy efficiency research agenda (for example, in the socialbehavioral area), so there should be an attempt to align research with these other areas and to 

coordinate with existing research efforts. For example, a number of utilities receiving smart 

grid investment grants from DOE have proposed consumer behavior studies as part of their 

smart grid/demand response rollouts. 

Some potential research topics that may assist states in addressing information gaps are 

identified in the discussion of the national communications program, and some are listed in 

Appendix A, where they are divided into two categories: social science51

Establish a Program for Technical Assistance for Demand Response

 research issues or 

technical issues. The Coalition and its stakeholders would work to prioritize these topics, 

identify additional topics, and select a subset as candidates for further research.

Purpose Provide support to states for implementing demand response. 

Expected 

Outcome

Demand response expertise is provided to states requesting assistance in the 

development and deployment of any and all forms of demand response. 

The provision of research and technical support in response to state requests is a core activity 

in any effort to provide technical assistance to states. DOE has provided federal support for 

this type of technical assistance for many years. As part of their support, DOE supports 

research and technical assistance activities to ISOs, utilities, and state and regional 

policymakers that support and enhance the development of demand response programs, 

technologies, services infrastructure, and dynamic pricing tariffs.

This activity involves establishing a program under which qualifying state agencies (e.g., state 

regulatory commissions or state energy offices), consumer advocacy groups, and utilities may 

apply for specific virtual or onsite technical assistance with demand response implementation. 

Subject to available funding, the federal government or the Coalition could oversee the 

provision of appropriate technical assistance to stakeholders. The nature of this assistance 

could range from referring a caller to a website, to providing the applicable reference 

material, to providing onsite technical help (for a day, a week, or longer). This program could 

also provide assistance to help states navigate federal/state jurisdictional issues related to 

demand response. The program would be coordinated with ongoing DOE technical assistance 

programs. 

The technical help could be provided through a number of avenues, including the following:

• Staff of a federal office. 

 

51 Social science research focuses on customer interest in demand response and how customers change 

their consumption or behavior in response to demand response programs or dynamic pricing.
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• National laboratory staff.

• Entities specializing in operational and dispatch algorithms to allow demand 

response to be incorporated as a resource, similar to generation resources.

• Funding for lead staff from a state that has successfully implemented a particular 

demand response program to travel to, and inform, another state developing a 

similar program.

• Entities specializing in demand response communications and marketing.

• Support for the NARUC-FERC Smart Response Collaborative. 

• Other knowledgeable individuals.

Provide Demand Response Grants 

Purpose Provide funding for demand response innovations (subject to available 

funding).

Expected 

Outcome

Innovative solutions to demand response problems.

Some states provide grants through regulatory entities — for example, the California Energy 

Commission’s Research, Development, and Demonstration Division (which administers $83.5 

million in public interest energy research funds). The California grant program focuses on 

developing and implementing commercially available demand response programs. In 

addition, DOE is using American Reinvestment and Recovery Act (Recovery Act)52 funds to 

support the deployment of many demand response technologies, programs, pilots, and 

demonstrations, as well as studies of customer behavior response. These grants will entail 

very extensive data collection and reporting, available publicly on the Internet through 

www.smartgrid.gov, and will provide a wealth of information that state regulatory authorities 

can use to make future decisions about demand response-related investments. 

The purpose of providing demand response grants would be to fund additional and targeted

development of demand response at the state level through pilots, implementation, and 

evaluation of demand response innovations. This evaluation would be designed to build on 

and leverage the activities funded at the state level and through the Recovery Act. Because 

innovations can emerge from a variety of sources, states or other legal entities, public or 

private, should be eligible to apply for a grant. Also, many states are not structured for 

distributing grants, so another entity would need to provide funding and oversight of the 

grant review process. Reviewers could evaluate and score grants based on criteria established 

by the Coalition. For instance, the criteria could favor programs, products, services, and 

technologies that have the potential for maximum, sustained deployment of cost-effective 

 

52 Pub. L. 111-5, 123 Stat. 115 (2009).
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demand response. Other criteria could include significant potential as established by 

scientific evidence, work in untested areas with strong potential, compliance with existing 

standards, and novel demand response applications that address climate change issues. Once 

grant winners are announced, an entity that has an existing grants administration 

infrastructure, working in conjunction with the Coalition, would oversee the relationship 

with the grantee, from award to final report.

Examples: Grant Programs

DOE’s SBIR/STTR Program

Each year (typically around the beginning of 

October), DOE issues a solicitation inviting small 

businesses to apply for SBIR/STTR Phase I 

grants. This program covers technical topics in 

such research areas as energy production 

(fossil, nuclear, renewable, and fusion energy), 

energy use (in buildings, vehicles, and 

industry), fundamental energy sciences 

(materials, life, environmental, and 

computational sciences and nuclear and high 

energy physics), environmental management, 

and nuclear nonproliferation. Grant applications 

submitted by small businesses must respond to 

a specific topic and subtopic during an open 

solicitation. 

http://www.er.doe.gov/sbir/

California Energy Commission

The California Energy Commission's Research, 

Development, and Demonstration (RD&D) 

Division supports public interest energy 

research, development, and demonstration. 

RD&D activities include providing contracts and 

grants for research and development of energy 

technologies and related scientific activities.

The RD&D Division administers a total of $83.5 

million in public interest energy research funds 

annually — $62.5 million for electricity and $21 

million for natural gas. 

http://www.energy.ca.gov/research/index.html
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34 Part 2: Strategies and Activities

2.2 National Communications Program

Introduction

Section 529 of EISA requires that the National Action Plan on Demand Response design and 

identify requirements for implementation of a national communications program that 

includes broad-based customer education and support. This section describes the design of, 

and identifies the requirements for, a national communications program that includes three 

elements: a Communications Umbrella; local implementation; and direct outreach to states, 

policymakers, and national partners regarding demand response communications programs 

and opportunities. 

A national communications program should be multifaceted to facilitate widespread 

acceptance and implementation of demand response to achieve the highest potential peak 

load reduction identified in the National Assessment. To account for the various approaches 

undertaken and considered for demand response implementation by states and localities, a

national communications program would not be a single, national effort to educate all

consumers at the same time, through a single channel and with the same message; rather, the 

national communications program would take a more tiered, localized approach that educates 

customers, as appropriate to each locality. A national communications program also must be 

highly adaptable and scalable to individual states, utilities, load-serving entities, and other 

demand response providers, without taking a top-down or one-size-fits-all approach. 

Simultaneously, the program would benefit from the coordinated research and insight that 

only a nationwide program can provide. It would not dictate a single message, which may 

not apply to all customers or electricity stakeholders; instead, it would provide a framework 

of messages that universally appeals to customers, but that can be employed in part or whole 

— as deemed appropriate by local demand response implementers — to each region, state, or 

locality.

Accordingly, this national communications plan provides the roadmap for a communications 

program that will educate residential, commercial, and industrial electricity customers, and 

support those customers as well as electricity providers, regulators, policymakers, and all 

others involved in implementing demand response programs. Designing the plan as a flexible 

roadmap for the national communications program enables communications around a variety 

of applications. These applications include incorporating price-responsive demand, 

automating demand response in all hours of the day, using demand response to provide 

operating reserves and other ancillary services, and partnering demand response with wind 

generation and other variable renewable resources.

This plan for a national communications program reflects the input of a broad range of 

industry stakeholders received through extensive outreach, a staff technical conference, and 

formally filed comments in response to the Discussion Draft and the Draft National Action 

Plan. 
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The multifaceted structure of the national communications program would mean that it 

would develop and support communications through multiple channels and media to 

communicate as appropriate with the many audiences for demand response. The national 

communications program would provide broad-based customer education and support though 

coordinated national and local action. At the national level, the program would develop a 

Communications Umbrella to provide the research-based message framework, 

communications tools, support, and advice, as requested, to local demand response 

implementers.

In addition, the Coalition would oversee direct outreach and educational programs at the 

national level to states, policymakers, and national partners to build support for demand 

response. By communicating with states, policymakers, and national partners, the national 

communications program would help build support for demand response in areas where there 

are no existing demand response programs or current plans to implement such programs.

At the local level, the national communications program should include an implementation 

strategy to inform residential and commercial customers about the availability and possible 

benefits of demand response programs, products, technologies, and incentives. Interested 

local demand response implementers would use the research-based message framework and 

communications tools and tactics developed at the national level to tailor messages and 

materials to conduct their own outreach to their particular customers. Local implementation 

includes demand response provided in regional RTO/ISO markets, states, and localities. The 

local implementation strategy would have two components: a demonstration program 

approach and support for other demand response programs. Under the demonstration 

program approach, local demand response implementers could volunteer to participate as 

demonstration programs to receive “hands-on” implementation message support and tactical 

advice. The demonstration programs could thereafter serve as successful program models or 

case studies that could then further inform the national message framework. 

The other component of local implementation should be support for other demand response 

programs. Local demand response implementers would not need to participate as 

demonstration programs to utilize resources developed at the national level. Local 

stakeholders who wish to take a more autonomous approach to demand response 

implementation, using only certain communications tools or resources as they determine 

appropriate, would fall into this category but would otherwise have access to the same 

message framework and tactical implementation recommendations as would demonstration 

programs. All local demand response implementers could access available toolkit materials to 

supplement their demand response efforts. As discussed later in this section, these materials 

would be customizable so that implementers could modify and tailor them to meet their 

particular needs and achieve their specific objectives. By targeting the program at the local, 

regional, and state levels, the communications messages would be more effective, and 

feedback on what works best could be used to influence the national effort. 
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36 Part 2: Strategies and Activities

Figure 2 shows the proposed national communications program structure, outlining the 

program and message development tasks to be overseen by the Coalition in the 

Communications Umbrella. The research and messages developed in the Communications 

Umbrella would then be used to 1) support local demand response implementers involved in 

demonstration programs and other demand response programs and 2) reach out to states, 

policymakers, and national partners to educate them about demand response. Later in this 

section, the structure and elements of the national communications program are discussed 

more extensively.

Figure 2: Program Structure 

Figure 3 shows the approximate sequence in which major tasks would be undertaken, 

indicating the overlap between some tasks and the ongoing nature of many. The diagram 

indicates that certain tasks, such as communications with states and policymakers, would 

occur over a long duration, while other tasks, such as foundational customer research and 

message development, would be more limited in duration in the initial stages (though 

possibly repeated at a later time if warranted). Multiple tasks would occur concurrently 

based both on their priority level and on the steps that must occur prior to each stage of the 

rollout.
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Figure 3: Program Development and Rollout Sequence Over Time 

Challenges in Designing a National Communications Program

The national communications program could face several challenges. First, no single 

nationwide demand response program is currently in place. Many different demand response 

programs, products, technologies, and incentives are being considered or implemented. 

Customer knowledge pertaining to demand response also varies greatly. In addition, because 

demand response implementation varies depending on the circumstances faced in various 

regions, it may be difficult and inappropriate to develop a “one-size-fits-all” message.53 Other 

challenges that a national communications program must consider include the diversity of 

stakeholder interests, the lack of broad-based knowledge about customer perceptions and 

motivations, the various energy initiatives competing for customers’ attention and funding, 

and the degree of receptivity to demand response and technical assistance among local 

entities. A national mass media campaign directly targeting residential and small commercial 

customers could be undertaken, depending on the availability of financial resource.54

Based on these challenges, the Coalition should initially focus on supporting local 

implementation efforts through national research and coordination rather than by initiating a

national mass media campaign. By supporting local efforts, the program would ensure that 

resources are spent to reach customers only when demand response programs are available to 

them. This feature helps ensure that a national communications program does not expose 

 

 

53 For example, in some localities, the action step for the customer might be, “You need to do nothing,” 

if an opt-out program is implemented that gives the utility, load-serving entity, or other demand 

response provider the ability to override the end-user’s air conditioning controls; for other customers, 

the action step might be, “Look for price signals, and then manually turn your air conditioner to a 

higher temperature,” if their utilities, load-serving entities, or other demand response providers 

introduce opt-in dynamic pricing.

54 Large commercial and industrial customers have greater awareness and knowledge about energy 

issues; therefore, a mass media campaign may not be appropriate for these customers.
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38 Part 2: Strategies and Activities

customers to confusing or conflicting messages, because local utilities, load-serving entities, 

other demand response providers, governors, state energy offices, and public utility 

commissions would serve as the chief communicators, and new messages would only 

supplement their current communications, not supplant them. By reaching out only to 

customers who, according to research, are receptive and can act on the information, the 

program will be more likely to be effective. However, this discussion should not been seen as 

limiting future efforts to reach more customers using the lessons learned from the National 

Action Plan effort.

Objectives of the National Communications Program

With these challenges in mind, the national communications program has the following 

objectives: 

• Increase electricity customers’ awareness and understanding of their energyconsuming behavior and the means to adjust their consumption to realize the most 

economical use of electricity. 

• Increase commercial and residential electricity customers’ awareness and 

understanding of demand response as it relates to other smart energy use principles 

such as energy conservation, energy efficiency, and the smart grid. (Research and 

outreach have shown that many large industrial customers are already largely aware 

of the potential benefits of demand response as well as how to implement demand 

response initiatives.) 

• Provide information to relevant states and policymakers (including, but not limited 

to, state and local governing officials, such as state legislators) about the potential

benefits and costs associated with demand response, including peak reduction and 

ancillary services to reliably integrate variable resources.

• Inform policymakers about the potential benefits of having a demand response 

program that could complement their smart grid, renewable energy, and

environmental goals.

• Inform renewable resource developers of the benefits of “partnering” with demand 

response to improve reliability and provide needed ancillary services.

• Support local utility, load-serving entity and other demand response providers’

activities that inform customers about the potential opportunities, benefits, and costs 

of demand response and thereby engender customer support and participation in 

demand response in their local programs.

• Establish measurable goals to meet the national communication program’s objective 

of broad-based customer education and support. The development of these goals
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Part 2: Strategies and Activities 39

would be coordinated by the Coalition, with benchmarks to facilitate program 

evaluation and accountability.

• Address concerns about negative effects on low-income, elderly, and disabled 

customers. 

National Communications Program Structure

The national communications program would function as a forum for communications 

development and as a supporter and resource for regional and local outreach to residential, 

commercial, and industrial customers. By compiling research on existing communications 

and marketing programs across the country and internationally, and conducting foundational 

research among electricity customers, the Communications Umbrella approach would be used 

to develop a message framework that local utilities, load-serving entities, and other demand 

response providers could employ at the local level. It would not take a top-down approach. 

Rather, it would look to the experience and best practices of local demand response 

implementers as the foundation of the Communications Umbrella approach, and conduct 

research only after understanding customers’ existing base of knowledge. Foundational 

customer research and analysis of the existing body of research would then proceed 

concurrently. 

This national communications plan outlines the specific roadmap for the national 

communications program that includes broad-based customer education and support. This 

program would have the following structural elements:

Communications Umbrella 

• Program development

• Message framework development

Local Implementation 

• Support for demonstration programs

• Support for other demand response programs 

Direct Outreach 

• Communications assistance to states and policymakers 

• Partnership development

Each of these elements will be discussed in further detail below.
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40 Part 2: Strategies and Activities

Communications Umbrella 

Purpose Provide a consistent communications program message framework, based on 

research conducted as part of the National Action Plan and additional, publicly 

available research and case studies that can be tailored to meet the unique 

needs of localities, states, and regions. Provide a well-researched strategic 

framework for communicating about demand response in localities, states, 

and regions. 

Expected 

Outcome

A body of customer research, a clear message framework, customizable 

message and communications materials, and a strategic communications 

roadmap for demand response implementation. 

A Communications Umbrella would provide a foundation for successful future 

communications about demand response, by leading the way on market research, creating a 

message framework, and providing outreach strategies and tactics on which to base national, 

regional, state, and local communications efforts. Figure 4 illustrates this relationship.

Figure 4: Interaction Between the Communications Umbrella and Local 

Implementation 

The Communications Umbrella would create a consistent message framework that local 

demand response implementers (especially utilities, load-serving entities, and other demand 

response providers) can customize and use to develop their own message and materials. More 

specifically, the Communications Umbrella would: 

1. Provide communications support and advice to local demand response implementers 

as new or enhanced demand response programs, markets, and products are 

developed at the local, state, and regional level, as discussed in greater detail later in 

this section.
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2. Develop a consistent message framework based on foundational market research 

conducted and compiled through the National Action Plan that utilities, loadserving entities, or other demand response providers and stakeholders can 

independently tailor to their own local audiences to foster greater demand response 

participation and to supplement their existing communications with customers. 

Messages could include information on the versatility of demand response resources 

for a variety of applications beyond lowering peak demand, such as automating 

demand response at all hours of the day, using demand response to provide 

operating reserves and other ancillary services, and partnering demand response 

with wind generation and other variable renewable resources.

3. Give local demand response implementers the information they need to disseminate 

communications locally to residential and small commercial customers in areas that 

are implementing new or improved demand response programs, products, 

technologies, and incentives.

4. Leverage the success of the demonstration programs to spread information and 

successful program and product models that can be replicated in areas that plan to 

implement demand response in the near term.

5. Eventually disseminate communications to all localities, states, and regions as 

opportunities for demand response become more widespread. 

The Communications Umbrella would focus on three target groups: 1) states, policymakers, 

and national partners who will make decisions about demand response implementation; 2) 

local demonstration program sites that have implemented or are implementing demand 

response and wish to have hands-on assistance in their outreach to customers; and 3) other 

demand response programs, including programs that are implementing demand response and 

wish to be fully autonomous in their communications with customers. The program would 

be most effective if it first helps stakeholders build decision-maker support and technical 

capacity for demand response implementation, then educates residential and small 

commercial customers through integrated communications in the localities and states that 

adopt demand response programs or where regional markets for demand response exist. 

Education would be conducted both in partnership with local demonstration program sites 

and by providing support materials to any sites that are not demonstration sites but want to 

implement demand response or supplement existing communications.

The responsibilities of the Communications Umbrella fall into two subsets: program 

development and message framework development. Communications Umbrella program 

development would involve compiling case studies and successful outreach tactics, 

identifying demonstration program sites, and conducting program evaluation. Message 

framework development involves conducting both a scan of existing research and new, 

foundational market research; developing adaptable customer-friendly messages; positioning

demand response as a component of smart energy use; developing communications materials 
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42 Part 2: Strategies and Activities

and toolkits; and developing support materials tailored to large commercial and industrial

customers. As explained previously in Figure 4, some of these tasks will occur concurrently.

Program Development

The Communications Umbrella would first study how local entities have communicated 

about demand response implementation across the country and internationally. This step 

might include messages, focus group feedback, advertisements, and other components. From 

there, the Coalition would oversee the selection of demonstration program sites from among 

those states, local load-serving entities, utilities, and other demand response providers that 

have requested support and — once their work begins — evaluate their success.

Compile case studies 

Though several entities have already compiled some data on demand response program 

implementation,55

Identify demonstration program sites 

there is no single repository for customer research, message testing, 

behavioral data, and the like. The Coalition would oversee the collection of such

nonproprietary data from as many sources as possible, given resource availability, and would 

make the data available through the Web-based clearinghouse, as discussed in Section 2.3. 

The best practices compiled through the clearinghouse would aid local programs in their own 

implementation efforts and, more importantly, inform the foundational customer research.

Identifying demonstration program sites or markets is essential to the structure of the 

Communications Umbrella development process whereby the results, experiences, and 

successes in one location provide input and feedback to inform others. The Coalition would 

oversee the development of a method for choosing sites from a pool of applicants; it would 

consider factors such as the willingness of local stakeholders to be vocal demand response 

leaders, the receptivity of local customers to participate in programs, and the availability of 

local resources that can be used to fund communications related to demand response. 

Demonstration programs will be discussed more fully in the “Local Implementation” section.

Conduct program evaluation 

The Coalition would oversee the development of metrics to evaluate the impact of particular 

outreach tactics and adjust the best practices and recommendations moving forward. 

Message Framework Development

The Communications Umbrella would develop the broad message framework and outreach 

strategies for the national communications program, which could then be customized by local 

 

55 Entities that have already begun compiling data and research from existing demand response 

programs include the Peak Load Management Alliance and the Demand Response Coordinating 

Committee, among others.
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stakeholders. For example, as discussed below, the Communications Umbrella could provide 

a template one-page message document outlining to customers what demand response is and 

how it impacts them, and stakeholders would have the ability to edit the document, change 

the wording as necessary for their circumstances, and add their own program logos to it, as 

well as reformat it entirely or use only part of it in their other communications with 

customers. 

Conduct foundational market research 

Foundational market research would be used to develop a nationally consistent message 

framework for demand response, similar to the ENERGY STAR® program.56

As a starting point, research would look at the success or failure of existing demand response 

programs and identify lessons learned. It would also involve original research with 

residential and commercial electricity customers to identify which incentives and messages 

each customer class would find most persuasive to modify their energy usage. Much of this 

research would be relevant nationwide. However, research would also help to identify how 

best to tailor the messages to account for regional differences in the structure of electricity 

markets, critical peak periods, demand response program design, pricing models, and 

structure of utilities. 

 The national 

message framework would facilitate customers’ understanding of demand response and its 

possible benefits. Regardless of the eventual funding level available for implementation of 

the National Action Plan, foundational market research should be considered a priority item, 

because it would inform the national communications program of the most effective demand 

response messages and outreach tactics. Additionally, numerous stakeholders commented 

that conducting foundational market research should be a high priority for the national 

communications program.

Formative research would help in assessing customer assumptions and understanding of key 

issues, conscious behavior, and what motivates customers to change their behavior. This 

foundational market research could include quantitative surveys of residential, commercial, 

and industrial customers, as well as qualitative research such as focus groups in numerous 

locations across the country and among varying customer classes. Key research questions that 

could be explored include: 

• How might messages be tailored to reach different classes of potential demand 

response customers with different demand response capabilities? 

• What messages are most effective to help customers understand what demand 

response is? 

 

56 ENERGY STAR® is a joint voluntary labeling program of EPA and DOE that is designed to identify and 

promote energy-efficient products to reduce greenhouse gas emissions. For more information about 

the program, visit http://www.energystar.gov/index.cfm?c=home.index. 
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• What messages are most effective to help customers understand demand response’s 

benefits? 

• What level of understanding of demand response do customers need in order to 

participate? Do they need to understand the concept fully, or is it enough to give 

them easy tools and instructions and inform them of demand response’s potential 

benefits ? 

• Are financial incentives such as electric bill savings or rebates the most powerful 

motivators? 

• Are customers more inclined to change their behavior if they learn that reducing 

peak demand helps the environment? For example, is there a difference in response 

between paying a customer not to consume (but no penalty if they continue to 

consume) and building in a discount that the customer surrenders if they do not 

respond (peak time rebate vs. critical peak pricing (CPP))? 

• How much inconvenience are customers willing to endure if their provider asks 

them to be part of a demand response program or product? 

• Who should broadcast the demand response event for it to have maximum impact?

• Do messages that promote energy efficiency or energy conservation conflict with or 

support demand response messages?

• Do customers react differently to messages that talk about demand response as 

preventing crises versus messages that frame it as a purely positive step as we 

increase the use of renewable energy sources?

Customers’ answers would help the national communications program shape its messages in 

all outreach support materials and ensure that the right messengers deliver those messages. 

In addition, having the answers to these and other research questions would benefit entities 

interested in investing in demand response programs, products, technologies, incentives, and 

infrastructure. 

Foundational customer research would also provide insight on the effectiveness of linking the 

concept of demand response to other smart energy use concepts (e.g., state renewable 

portfolio standards, climate change, energy efficiency, regional markets, smart grid), 

compared with the effectiveness of educating customers about demand response as a wholly 

separate concept in order to achieve peak use reductions. 

Finally, the research would help to determine the best market segments to target to achieve 

the greatest behavioral shifts for the lowest cost. Because virtually every person and every 

business uses electricity, the potential audience for this program is the entire adult 

population, which would be prohibitively expensive for any program to reach. Therefore, 
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Part 2: Strategies and Activities 45

“zeroing in” on smaller groups would help to ensure efficient message delivery and avoid 

wasting time and resources on audiences who are unlikely to change their behavior.57

Develop adaptable, customer-friendly messages 

 This 

knowledge would inform the overall strategic and tactical recommendations developed 

through the Communications Umbrella for use by local programs.

The majority of stakeholder comments stated that “demand response” is not a customerfriendly term. Another objective of the Communications Umbrella would be to reframe 

demand response with new, more customer-friendly terminology that would better explain 

the concepts of energy use reduction, load shifting, and managing energy usage in response to 

price or non-price signals, in conjunction with other smart energy use principles. The 

Coalition would oversee research to help determine the terminology that best conveys to 

customers what demand response is and how it can benefit them. 

In addition to reframing the demand response concept, the Communications Umbrella would

develop a message framework with persuasive, adaptable messages aimed at various audience 

segments, all of which could be tailored by interested local stakeholders. The program would 

segment the audience into discrete groups based on their varying motivations and 

circumstances, and messages would differ slightly for each segment. Messages must first 

define the problem that demand response programs could help to resolve; messages could 

then establish the urgent need for demand response implementation and explain appropriate 

ways to modify behavior. How best to communicate the problem and its solution may vary 

by audience. To simplify this notion, Table 1 provides examples of message categories for 

diverse audiences. The Coalition would oversee the development of messages for various 

audience segments within the message framework, with research providing insight into the 

most persuasive ways to convey the content listed in the Table.58

 

57 For example, the California Statewide Pricing Pilot found that residential, medium commercial and 

industrial, and large commercial and industrial customers are more responsive to dynamic rates than 

are small commercial and industrial customers in the absence of automating technologies. See

Charles River Associates, Impact Evaluation of the California Statewide Pricing Pilot (2005), available 

at

http://sites.energetics.com/madri/toolbox/pdfs/pricing/cra_2005_impact_eval_ca_pricing_pilot.pdf.

58 Note that the technical assistance would help to provide the underlying factual basis for the content of 

the message.
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46 Part 2: Strategies and Activities

Table 1: Segmentation of Message Framework

Audience/“Who” Message 

Content/“What” Messenger Delivery/“When”

Key stakeholders Be a part of the Coalition 

that will lead the demand 

response program

Federal/state/

local governments, 

utilities/loadserving entities/

other demand 

response 

providers, 

RTOs/ISOs/ 

commercial and 

industrial 

customers, 

consumer 

advocates, 

existing coalitions 

of these 

organizations

Immediately/

continually (as 

outreach begins in 

new states)

All stakeholder 

leadership

Implement your demand 

response goals with our 

support

Coalition Short-term/ongoing 

Stakeholder 

leadership in 

states, localities, 

and regions with 

demand response

We can support and 

supplement your efforts 

with technical and 

communications assistance

Coalition Short-term/ongoing 

(continually as new 

states adopt 

demand response)

Stakeholder 

leadership in 

states, localities, 

and regions 

receptive to 

demand response

Implement demand 

response with our support; 

once implemented, we can 

support and supplement 

your efforts

Coalition Short-term, 

medium-term, 

long-term

Stakeholder 

leadership in nondemand response 

states

Look at success in other 

states and localities as a 

potential roadmap; we can 

help you achieve your 

unique goals

Coalition Medium-term, longterm (continually as 

success stories and 

best practices 

emerge)

State and local 

governing officials

Support customer interest 

in implementing and 

receiving benefits of 

demand response 

Coalition Short-term/ongoing 

Utilities, loadserving entities, 

and other demand 

response providers

Use our support to 

communicate with 

customers and provide 

additional sources of 

ancillary services and tools 

to reliably integrate 

variable resources

Coalition Short-term/ongoing 
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Part 2: Strategies and Activities 47

Audience/“Who” Message 

Content/“What” Messenger Delivery/“When”

Large commercial 

and industrial 

customers

Implement demand 

response because it can 

provide widespread 

benefits, save you money, 

and be directly beneficial 

to you as a participant in 

wholesale markets

Coalition, 

utilities/loadserving entities, 

public utility 

commissions, 

other demand 

response providers

Short-term/ongoing 

Current residential 

and commercial 

customers with 

access to demand 

response 

programs 

Join the program because 

it can provide widespread 

benefits (e.g., you could 

earn a cash rebate, protect 

our power supply, and 

promote the use of clean 

energy) 

Utilities/loadserving entities, 

public utility 

commissions, 

Coalition, other 

demand response 

providers 

Medium-term, longterm (continual rollout as new states 

and localities adopt 

demand response)

Low-income, 

elderly, and 

disabled 

customers with 

access to demand 

response 

programs 

Join the program because 

it will provide you with 

benefits (it could save you 

money and could protect 

your power supply) and 

will not raise your costs or 

hurt your quality of life

Utilities/loadserving entities, 

public utility 

commissions, 

Coalition, other 

demand response 

providers 

Medium-term, longterm (continual rollout as new states 

and localities adopt 

demand response)

Future customers Demand response is an 

important way to reduce 

energy use during peak 

periods, protect the 

environment, and promote 

the use of clean energy

Coalition, utilities, 

load-serving 

entities, schools, 

other demand 

response providers

Medium-term, longterm

Customer 

advocates

Support demand response 

nationwide because of its 

widespread benefits (e.g., 

less need for future power 

plants, safer power supply, 

potential money savings)

Coalition, other 

demand response 

providers 

Short-term/ongoing 

Renewable 

resource 

developers

Partner with demand 

response for ancillary 

services

Coalition Short-term, 

medium-term, 

long-term
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48 Part 2: Strategies and Activities

The Communications Umbrella would develop comprehensible, research-based messages 

aimed at the audience segments outlined above. It would also craft messages that would 

increase awareness, encourage customers to modify how they consume electricity, and assist 

customers that want to participate in available demand response programs. 

For example, when addressing residential customers in areas with available demand response 

programs, products, or markets, a generic message framework might inform them about the 

following topics:

• Variability of electric prices and sources. Inform customers that the cost of 

generating electricity varies by time. During “peak periods” when there is high 

electricity demand, electricity is more expensive to produce. Also inform customers 

about which generation sources are used by time of day and during peak periods.

• Urgency of demand response. Communicate the urgency of the need for demand 

response, load shifting, energy efficiency, energy conservation, etc. 

• Actions to take. Educate customers about specific actions they could take at critical 

peak periods to reduce electricity use, and publicize the potential benefits of 

participating in demand response. These messages would highlight the importance 

and value of taking action by tying that action to the most effective customer

motivations, such as potential electricity bill savings or environmental benefits.

• Minimizing negative impacts. Provide reassurance to customers that any negative 

consequences of demand response implementation have been anticipated and would 

not pose a threat to them. These messages would lessen customers’ concerns and 

prevent customer backlash, in concert with messages about the need for demand 

response, the specific actions to take, and the benefits of taking them.

When addressing large commercial and industrial customers, the message framework might 

inform them about:

• Compensation. Inform customers that their actions can not only reduce bills, but, in 

some parts of the country, also result in compensation opportunities. 

• Opportunities. Educate large commercial customers about the role they may be able 

to play by participating in local utility programs or in regional markets (such as 

participating in demand response programs that could help to integrate variable 

energy resources like wind generation into the system), if applicable.

Foundational research, message testing, and Coalition input will help to determine whether 

these messages or others are appropriate and whether they motivate customers to change 

their behavior.
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Part 2: Strategies and Activities 49

The Communications Umbrella also could work with a sampling of local demand response 

implementers to develop messages to educate customers about specific actions they could take 

at critical peak periods to reduce electricity use.

The intended outcome of the message development and testing process is to create a message 

framework that local stakeholders can adopt to communicate with customers, or that they 

can use to supplement or modify their own communications.

Following the finalization of the message framework, the Communications Umbrella would 

develop template advertising materials — including a template TV advertisement, a template 

radio advertisement, a template online advertisement, a template print advertisement, and

template direct mail — that local stakeholders could use in their outreach efforts. To save on 

costs, the materials could be designed so that they would be produced once but still be 

customizable with graphics and website URLs for a specific state, load-serving entity, utility, 

or other demand response provider’s demand response program. 

Position demand response as part of overall smart energy use 

A core question in the development of messages for the program is how best to position 

demand response in relation to other smart energy use concepts, such as renewable energy, 

load shifting, energy conservation, energy efficiency, and smart grid. Which relationship best 

aids customer understanding? In addition, messages should consider providing linkages to 

known, evolving, and emerging technologies (e.g., automated demand response such as AutoDR for commercial and industrial facilities) and opportunities in retail and wholesale energy 

markets. Anecdotal market research to date shows that consumers already confuse these 

concepts of energy conservation and energy efficiency, so positioning demand response as a 

new twist on existing concepts may create further confusion. Though foundational customer 

research would provide the best insight, it may be necessary to link demand response with 

other smart energy use principles to increase customer understanding, or even to use other 

smart energy use terms to describe demand response.

Linking the concept of demand response with other smart energy practices would provide a 

strategic framework to integrate the education and promotion of demand response with other 

federal government or state-based initiatives to educate customers on smart energy use or 

sustainable energy conservation practices. For example, under the ENERGY STAR® 

program, DOE and EPA jointly market cost-effective opportunities for customers to receive 

the same level of service by using fewer kilowatt-hours of electricity, saving money and 

reducing carbon emissions. 

The Coalition could work with existing renewable energy, energy efficiency, smart grid, and 

other related initiatives to oversee the development a comprehensive message. Doing so 

could persuade customers to take action and alter their energy use patterns, while meeting 

the communications objectives of each of the individual programs. 
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50 Part 2: Strategies and Activities

Develop communications materials, tactics, and toolkits 

To support all stakeholders implementing demand response initiatives, the Communications 

Umbrella would develop a suite of toolkit materials that stakeholders could use to create their 

own customized communications programs or to supplement local communications. Toolkit 

materials (explained in greater detail in the “Support for Other Demand Response Programs” 

section) would include message research data and analysis, guidance on demand response 

messages, strategies and tactics for effective audience targeting and outreach, and 

customizable advertisements and other communications materials.

Develop support materials tailored to large commercial and industrial customers 

Residential and small commercial customers are a very important part of the audience for 

demand response, and reaching this audience segment effectively would have the greatest 

positive impact on broad public opinion surrounding demand response. But effective 

communications to residential and small commercial customers cannot begin until demand 

response programs, products, technologies, and incentives are in place in their states or 

localities.

Unlike residential customers, large commercial and industrial customers generally have 

greater awareness and knowledge about energy and actions that can be taken to adjust their 

electricity consumption. In addition, both retail and wholesale demand response programs 

are already available in many places throughout the country in which these customers may

participate. Because of this greater sophistication on energy issues, existing program 

availability, and the likely cost-effectiveness of these programs, outreach efforts to these 

customers could result in immediate benefits associated with demand response participation 

by this sector. 

Working at the national and local levels, depending on the customer, the Coalition would 

coordinate outreach to large companies to inform them about demand response and available

opportunities to provide it. This outreach would showcase how demand response can be 

made available through distinct messages and template materials geared toward large-scale 

customers. 

The Coalition would work with state and local stakeholders to provide materials about best 

practices and model program guides that would help large customers participate in demand 

response programs offered by a utility, load-serving entity, other demand response providers, 

or RTO/ISO markets. Template slide show presentations could be used to inform customers 

and enlist their support. A template press release could be customized to congratulate and 

thank large commercial and industrial customers for investing in demand response. 
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Part 2: Strategies and Activities 51

Local Implementation

Support for Demonstration Programs

Purpose Advise states and localities on communications best practices as they adapt 

the Communications Umbrella to increase exposure of and participation in 

demand response in their own localities. Provide logistical support and 

coordination for communications around local demand response 

implementation.

Expected 

Outcome

Tailored communications that integrate the broad, national messages with the 

local program’s needs and unique characteristics.

A core element of the national communications program is the implementation of a broad 

strategic and message framework through a local demonstration program approach. 

This local implementation demonstration program approach would first roll out in areas that 

have requested the national communications program’s support and have already 

implemented or are on the verge of implementing pilot or full-scale demand response 

programs and products. The demonstration program approach would then spread (as 

requested) to areas that plan to implement programs and products in the near term, and 

would eventually become national in scope as implementation becomes more widespread. 

The national communications program could coordinate with DOE’s Recovery Act stimulus 

grants. For instance, several of the recipients of the stimulus grants will be conducting 

controlled experiments of the response to the smart metering and dynamic pricing. These 

experiments could serve as examples within the demonstration program approach. 

Using broad, nationally developed messages, the Communications Umbrella would advise 

local load-serving entities, utilities, and other demand response providers that have agreed to 

participate and have been selected as demonstration programs on how to translate the 

Communications Umbrella messages and strategies to their own local demand response 

initiatives, seasonal peak load patterns, and any other regional factors. 

The strategy for communicating messages around local demand response implementation is

an integrated communications program, not reliant on one particular communication method 

or medium. The integrated marketing elements supported by the national communications 

program for a sample demonstration program could include: 

• Public relations. An important tactical component of a local communications 

program would be a comprehensive news media outreach and public relations 

strategy. This strategy would build public and policymaker support for demand 

response in conjunction with direct communications outreach to states and 

policymakers (discussed later in the Direct Outreach to States, Policymakers, and 

Partners subsection) and the technical assistance to states discussed in Section 2.1. It 

would also educate customers by garnering news coverage about demand response. 

By communicating with members of the news media about demand response’s 
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52 Part 2: Strategies and Activities

benefits, the need for it, and the ease of implementation for the customer, positive 

news stories and editorials would help to shape public opinion in favor of demand 

response. In addition, appearances by experts on talk shows would give more 

customers a better understanding of demand response.

• Advertising. If local resources allow, advertising or public service announcements 

(PSAs) could be a key part of local communications efforts, with the national 

communications program providing the template advertisements or PSAs that could 

be tailored to reference local programs and information. Media buys for paid 

advertising could be funded by states or localities, utilities, load-serving entities, 

other demand response providers, or a combination of these groups. If paid 

advertising funding is unavailable, the PSA version can be used to attain free 

placements of the same messages. To reach the broadest range of customers in each 

market, depending on which customer segments the foundational research indicates 

offer the best opportunity, advertising might run on:

• Television 

• Radio

• Outdoor media, such as billboards and advertisements on buses

• Direct mail

• Internet 

• Emerging media technologies, such as cell phone text messaging

The Communications Umbrella would also develop attractive, customer-focused 

educational support materials, which could be tailored with local information and 

would be available digitally for stakeholders’ use (e.g., brochures, videos, PSAs, a 

reference website).

• Viral59

• The creation of groups within social media sites like Facebook and Twitter, 

as well as new sites as they gain popularity.

 and grassroots marketing. In addition to a local mass media program, a fully 

integrated communications program could also include a grassroots approach that 

leverages emerging social networks in the digital space. A viral and grassroots 

marketing outreach might include:

 

59 “Viral marketing” refers to marketing intended to be “spread” by those to whom it is marketed, 

instead of via traditional media channels like news and advertising. For example, a viral video is 

produced with the intent that people within the target audience would view it and then share it with 

their friends and associates, who would in turn share it with their own networks, and so on. This 

spreading of content through social networks is called viral marketing because of its similarity in 

structure to the public health model of a virus spreading from its original source.
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Part 2: Strategies and Activities 53

• The engagement of third-party “demand response champions” who can blog 

or tweet about it.

• Development and posting of viral videos that demonstrate the potential 

benefits of demand response or, alternatively, what the future might be like 

without demand response.

This type of approach could potentially tie into a national communications program 

over time, as the social network around the groups, champions, and videos grows 

larger and more geographically diverse.

Example: Grassroots Marketing

In 2007, UNICEF created a grassroots 

initiative called the Tap Project, which 

raises money during World Water Week 

with the goal of providing clean water to 

children around the world. The Tap 

Project began in 2007 as a demonstration 

program in New York City and has now 

expanded to all 50 states. The national 

campaign develops the broad campaign 

message platform, an annual theme, and 

template materials, and then hands them 

over to individual communications teams 

in each of the targeted cities. Each city’s 

team translates the messages and theme 

into its own campaign and launches that 

campaign through PSAs, news media 

outreach, local events, and extensive 

online viral and grassroots marketing. 

The result is a series of localized 

communications efforts with their own 

unique characteristics.
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54 Part 2: Strategies and Activities

Support for Other Demand Response Programs

Purpose Provide tools adapted from the Communications Umbrella so regions, states, 

and localities can employ the messages and tools most useful to them in 

informing customers and stakeholders about demand response.

Expected 

Outcome

A broad spectrum of toolkit materials that can supplement an entity’s existing 

communications efforts, add an additional program layer, or serve as a new 

program where previously there was none. Guidance on strategies for 

effective customer outreach.

To support the efforts of utilities, load-serving entities, and other demand response providers 

that do not directly participate as demonstration programs, the Coalition could oversee the 

development of template toolkit materials, as mentioned earlier in this section, enabling those 

entities to manage their own local demand response communications programs. The 

materials in the toolkit would be customizable to account for a local program’s name, logo, 

website URL, and needs. The toolkit materials would be designed to be “plug and play” so 

that local entities would be able to use all available messages and materials or choose which 

elements to use. Local stakeholders, states, or localities could fund local implementation of 

toolkit-based communications efforts. 

Toolkit materials could include: 

• A foundational customer research primer covering customer behavior, responses to 

various terms and messages around demand response, findings on how best to 

position demand response as a part of smart energy use, and analysis of how best to 

segment audiences to achieve maximum results.

• Sample messages, which can be tailored with local program information and 

segmented by audience type, seasonal peak load pattern, general demand response 

program and pricing design, and other variables.

• Template talking points for local utilities, load-serving entities, and other demand 

response providers, segmented by the variables outlined above.

• Template PSAs that can be run on local television without charge, as well as 

guidance on how to get PSAs placed on local broadcast and cable networks.

• Template press materials, including press releases introducing a new program or 

announcing the introduction of new technology or pricing, frequently asked 

questions for journalists about demand response, and how-to guides for media 

outreach. 

• Print-ready materials such as brochures and flyers, designed to be printed with local 

logos, program names, and website URLs inserted.
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Part 2: Strategies and Activities 55

• Advertising for TV, print, radio, outdoor, and online media, all of which can be 

tagged with local program information. 

• A sample integrated communications program plan, outlining how best to maximize 

the local program’s impact with a combination of various outreach methods, as well 

as guidance on how to select media to reach the most receptive audience segments. 

Example: Communications Toolkit

 

The Covering Kids & Families 

campaign provided free toolkits and 

message guides to anyone 

interested in reaching out to families 

about children’s health coverage. 

The campaign developed tools such 

as the comprehensive “Back-toSchool Campaign Action Kit,” which 

provided templates and tools to do 

everything from writing and sending 

a press release to conducting a local 

enrollment event and press 

conference. Another toolkit provided 

step-by-step instructions on 

customizing and placing a PSA. 

These toolkits even enabled 

organizations that were not official 

grantees or demonstration programs 

to be a part of the larger campaign 

and get the message out in the most 

convenient way.
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56 Part 2: Strategies and Activities

Direct Outreach to States, Policymakers, and Partners

Purpose Provide a general framework of support for demand response implementation 

programs taking place across the country.

Expected 

Outcome

Broader education for policymakers and stakeholders necessary to the 

successful implementation of demand response, and national and regional 

partnerships supporting local efforts.

Although the bulk of the national communications program activities — particularly public 

education — would take place at the regional and local levels, there is an important role for 

certain national activities that would amplify the impact of local communications. 

Communications Assistance to States and Policymakers 

Support to states, localities, and regions would be another key part of the national 

communications program. Communications programs or meetings would be provided, 

possibly as part of regional workshops, to educate state and local governing officials on how 

to communicate with customers about demand response. Such educational programs would 

offer an opportunity to share findings from consumer research and demand response experts, 

provide information on messages to engage various stakeholder and consumer audiences, and 

provide tools to ensure state and local governing officials can begin reaching out to customers 

with educational information about demand response programs, products, technologies, and 

incentives. Because support from state and local governing officials is important for demand 

response implementation, efforts to implement demand response programs and products 

locally may benefit from the Coalition coordinating the provision of communications 

assistance to state and local governing officials and stakeholders to allow them to properly 

assess and understand demand response in an unbiased manner. Such communications 

assistance might include: 1) communications education and message guides that outline the 

need for demand response action, 2) national spokespeople to inform media and state and 

local governing officials, and 3) assistance in building support for demand response among the 

general public. This assistance would enable policymakers and others to inform customer 

groups about demand response opportunities and capabilities they can incorporate into their 

businesses, industries, and homes, ultimately boosting customer acceptance of demand 

response. 

Partnership Development

The national communications program would foster development of national and local 

partnerships between the Coalition and 1) corporate partners whose customers are making 

decisions about electricity usage; 2) organizations representing various customer classes, such 

as commercial and industrial customers, certain subsets of residents, etc.; and 3) trade 

associations or other groups that would benefit from partnerships, e.g., the pairing of variable 

resource development with dispatchable demand response. 
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Part 2: Strategies and Activities 57

Both manufacturers and retail sellers of large home appliances that could be demand 

response– or smart grid–enabled would be ideal partners for the program. Because these 

corporations regularly interact with the public (e.g., when customers consider purchasing 

new appliances), achieving some program and message visibility at the point of purchase 

would be extremely advantageous and would reach the audience when it is most receptive. 

Similarly, partnerships among trade associations, such as those representing industrial 

customers and those representing wind resources, might help states meet renewable portfolio 

standards. 

Partnerships between for-profit corporations and nonprofit cause-related programs are 

common. Corporations are eager to participate in such partnerships if they believe their

participation could have positive business repercussions or improve their image through 

association with a worthy cause. For example, a home improvement retailer chain may be 

interested in partnering with the national demand response program to 1) associate the 

company with an energy-saving initiative that shows its customers that it is forward-looking 

and concerned with environmental health, and 2) increase sales of demand response– or 

smart grid–enabled appliances. Partnering with such a company could make demand 

response issues more visible to customers and create additional touchpoints between the 

customer and the issue beyond traditional media outlets.

In terms of organizational partnerships, groups that represent businesses, industrial 

customers, and subsets of the public at large would be excellent program partners, as they 

provide access to millions of key business and household decision-makers through their 

communications networks. Such groups include trade associations and consumer advocacy 

organizations. These types of partnerships would allow the Communications Umbrella to 

target the groups or geographic regions that can make the best use of demand response to 

reliably and economically meet goals and objectives at the local, state, regional, national, or 

individual levels. Coordination with key associations representing these customer segments 

could increase the effectiveness of a communications strategy while reducing costs. 

Corporate and organizational partners would be selected on the basis of their reach within 

key audience segments, their relevance to advancing the issue, and their ability to commit 

resources to support the effort. They also could support message outreach to groups that 

might not otherwise learn about the benefits of demand response programs, or that might not 

have the information necessary to improve their lives by participating in demand response 

programs. 
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Example: National and Local Communications Partnership

 

The Covering Kids & Families campaign 

sought to enroll eligible children and 

families in public health insurance 

programs. To get these children enrolled, 

the campaign had to reach their parents. 

Through the development of corporate 

partnerships, the campaign gained 

millions of dollars of in-kind placement in 

retail environments where parents are 

most likely to be thinking about their 

children. In a partnership with Giant 

Foods on the East Coast, the campaign 

secured placement of an enrollment PSA 

on the sides of milk cartons during the 

back-to-school time period. In a 

partnership with CVS/Pharmacy, the 

campaign ran PSAs on the prescription 

information forms for anyone under the 

age of 18. These partnerships involved 

no direct costs for the campaign but 

provided enormous added visibility for its 

messages.

2.3 Tools and Materials For Use by Customers, States, 

and Demand Response Providers

Section 529 of EISA requires that the National Action Plan develop or identify analytical 

tools, information, model regulatory provisions, model contracts, and other support materials 

for use by customers, states, utilities, and demand response providers. Therefore, in this 

section, the National Action Plan identifies tools and materials that can be used by customers, 

states, and demand response providers. The Coalition or the federal agency would oversee 

the development and management of these tools and materials. The level of effort put into 

these tools and materials will depend on the funding and other resources available for 

implementation. With limited resources, the elements proposed in this section would largely 

be enhancements of existing tools and support of ongoing efforts. New and innovative tools 

and materials would be developed if more resources can be applied.

The development and enhancement of tools and materials will serve several objectives. For 

instance, states not currently engaged in demand response will have access to a 

comprehensive source of information that could help them decide what types of demand 

response programs are appropriate. States that are already engaged in demand response will 

be able to share their experiences and gather more information about how to measure results 

and improve their programs. Utilities will be able to examine other pilot program design and 
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results, while consumers will have tools to help them decide if they would benefit from 

demand response programs. All of this information will help optimize program benefits.

Based on stakeholder input and further research, the National Action Plan contains two 

general categories of action for the development of tools and materials:

1. Develop a Web-based clearinghouse of demand response materials.

2. Develop or enhance demand response estimation tools and methods.

Develop a Web-based Clearinghouse of Demand Response Materials

Purpose Provide easily accessible, accurate information on demand response for 

stakeholders.

Expected 

Outcome

Increased awareness of existing demand response experiences and their 

reported benefits and lessons learned, resulting in additional use of welldesigned demand response programs. 

There is strong support for developing an easily accessible website database, or “Web-based 

clearinghouse,” to serve as the centralized location for collecting all publicly available 

information on demand response, including regulatory documents, program reports, general 

demand response information, and communications material. The goal for the Web-based 

clearinghouse will be to provide stakeholders and consumers with the most current 

information and analyses on demand response. 

The Web-based clearinghouse may be included as part of an existing federal agency 

clearinghouse or may be privately funded and maintained by the Coalition. In either event, 

the Web-based clearinghouse for demand response would include information that 

stakeholders can use to make their own evaluations and judgments on the reports and 

information that the Web-based clearinghouse contains. For example, in addition to posting 

a report on a demand response pilot program, it would present guidelines, criteria, and 

metrics that can be considered when evaluating pilots. Additionally, the clearinghouse would 

be a useful tool for making technical papers (developed as a result of Coalition discussions) 

available to states and others.

The Web-based clearinghouse should build on and collaborate with existing efforts to collect 

data on demand response programs and reports. The most relevant ongoing effort in this area 

is the new DOE-sponsored Smart Grid Information Clearinghouse.60 The Web-based 

clearinghouse for demand response could be coordinated with this effort, which was 

launched with a $1.3 million budget (provided from the Recovery Act) in September 2009.61

 

60 DOE, DOE Announces Funding Opportunity to Develop the Smart Grid Information Clearinghouse

(2009), available at

 

http://www.oe.energy.gov/news_room_and_events/1223.htm. 

61 Rich Sedano, Smart Grid Information Clearinghouse, Presentation to NARUC-FERC Smart Grid 

Collaborative, available at http://www.narucmeetings.org/Presentations/FercSmartGrid_Sedano.pdf. 
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Based on preliminary information, the Smart Grid Information Clearinghouse may include a 

significant amount of the demand response materials intended for the Web-based 

clearinghouse in the National Action Plan.62 The Smart Grid Information Clearinghouse is 

expected to launch publicly in September 2010.63

This Web-based clearinghouse can use other efforts as a model. One is DSIRE, the Database 

of State Incentives for Renewable Energy — another DOE-funded project for collecting and 

distributing information about renewable energy and energy efficiency efforts. The DSIRE 

website provides users with visual tools for understanding the current status of funding, 

standards, and state and federal incentives and mandates for renewables. It also contains 

information about financial incentives and regulations regarding energy efficiency, along 

with an extensive library of industry presentations and reports provided on a state-by-state 

basis. This information allows for easy comparisons of programs and policies across states and 

provides a simple means for understanding the “landscape” of energy efficiency and 

renewable energy policy in the United States. Stakeholders have identified DSIRE as a useful 

example of an online clearinghouse for information.

The California Measurement Advisory Council (CALMAC) maintains a website containing 

information on demand-side programs in California. The purpose of the CALMAC website is 

to provide “...a forum for the development, implementation, presentation, discussion, and 

review of regional and statewide market assessment and evaluation studies for California 

energy efficiency programs and demand response...”64

The objectives of the Web-based clearinghouse would change over time. In the short term, 

the effort would be focused more on assembling the results of pilots and studies on the 

impacts and benefits of new dynamic pricing and smart grid-enabled programs. This 

information would help to establish confidence in the ability of these new programs to 

provide reliable benefits. In the long term, as programs become established through full-scale 

implementation, the focus would shift to identifying model programs and policies, as well as

prioritizing findings from the research that has been conducted.

 The site’s searchable database is

helpful for finding relevant, up-to-date materials, particularly impact evaluations conducted 

by utilities and independent consulting firms. This type of information could be included in 

the Web-based clearinghouse.

The following subsections describe the types of content that the Web-based clearinghouse 

could include.

 

62 Id. 

63 Id. 

64 See California Measurement Advisory Council, http://www.calmac.org/ (last visited Jan. 21, 2010). 
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Case Studies of State Laws, Regulations, and Tariffs

The Web-based clearinghouse would provide access to comprehensive case studies that 

include specifics about demand response programs. For example, information regarding state 

laws, regulations, tariffs, generation mix, forecasted load, technology employed, 

communications strategy, and retail cost recovery would provide helpful contextual 

information for understanding and comparing demand response programs. To the extent 

possible, actual laws, regulations, and tariff language would be provided.

State laws, regulations, and tariff language included in the Web-based clearinghouse could be 

used as a sample or template that stakeholders can adapt, based on their unique goals, 

preferences, and needs, in developing their programs and policies. Furthermore, any 

contextual information that is included would help stakeholders adapt the state laws, 

regulations, and tariff language to their unique circumstances.

For example, California’s Energy Action Plan includes a model regulation for preferred 

loading order of resources: energy efficiency; demand response; renewable energy sources; 

and conventional generation options that could be included in the Web-based clearinghouse 

for other states to use as a model for similar legislation.65 Also, California’s Energy Action 

Plan set a target reduction in peak demand of 5 percent for 2007.66 When the three investorowned electric utilities only achieved 40 percent of that target in 2007, the utilities were 

asked to revamp their efforts. Simultaneously, CPUC approved business cases for the 

deployment of AMI by all three utilities67

Connecticut provides another example of a regulation-related case study. The Connecticut 

state legislature passed legislation that required electric distribution companies to conduct 

integrated resource planning beginning on January 1, 2008.

and then issued a landmark ruling making dynamic 

pricing the default tariff for all nonresidential customers who were part of AMI. Information 

about California’s Energy Action Plan, coupled with updates about how it is being carried 

out, would help other states if they undertake similar efforts.

68 The identified resource needs 

must first be met through all available energy efficiency and demand reduction resources that 

are cost-effective, reliable, and feasible.69 Among other things, the electric distribution 

companies’ procurement plans must specify the amount of demand-side measures, such as 

demand response, that can meet the capacity planning needs.70

 

65 Id.

66 Id.

67 See, e.g., California Public Utilities Commission, Decision Adopting Dynamic Pricing Timetable and 

Rate Design Guidance for Pacific Gas & Electric Company, D. 08-07-045 (2008).

68 Conn. Gen. Stat. § 16a-3a (2008).

69 Id., § 16a-3a(c).

70 Id.
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Database of Pilots, Programs, and Markets

There are different types of demand response programs across the country. The Web-based 

clearinghouse should include a database of both pilot and fully implemented demand 

response programs. The database should include general descriptions of each of these 

programs and, to the extent possible, reports that summarize each program’s results, lessons 

learned, and benefits and drawbacks.

Information on the programs should be supplemented with marketing materials, surveys of 

customer satisfaction, and the names of contractors or vendors that provided enabling 

technology and devices that supported demand response. These materials would provide 

useful qualitative information that stakeholders could use to enhance their own programs. 

Furthermore, the lessons learned from this information could supplement the 

communications materials that are developed as part of the communications program (see 

Section 2.2).71

The existence of a central collection of reported impacts from existing demand response 

programs and products would help shed light on the ability of demand response to provide 

consistent, measurable impacts and would also serve as a resource for benchmarking newly 

reported impacts from demand response program offerings.

The Web-based clearinghouse should include a broad mix of programs to serve as case studies 

in program design, implementation, and evaluation. Examples include new pilot programs 

run by utilities such as Consumers Energy in Michigan, Commonwealth Edison in Illinois, 

Baltimore Gas & Electric in Maryland, and Northeast Utilities in Connecticut, as well as 

mature programs such as Detroit Edison’s Direct Load Control Interruptible Air 

Conditioning72 program and California’s “Flex Your Power” campaign to promote customer 

awareness of pending energy shortages and encourage reduced energy use.73

Quantitative and Qualitative Summaries 

 Users of the 

Web-based clearinghouse would be able to find information on each of these programs and, if 

they exist, reports evaluating the impacts of each program. With this information, users 

would be able to compare and contrast the value of each program, which would help to 

inform their decisions on how to implement their own programs.

Detailed supply-side information is contained on the U.S. Energy Information 

Administration’s website. The Web-based clearinghouse will aspire to provide a similar level 

of granularity in demand-side information. Examples of data that could be collected include a 

 

71 The Web-based clearinghouse should serve as a central location for communications materials as well. 

For information on these materials, see Section 2.2.

72 DTE Energy, Interruptible Air Conditioning Rate (2009), 

http://www.dteenergy.com/residentialCustomers/billingPayment/rates/electric/interruptibleRates.html.

73 For more information about the Flex Your Power campaign, visit http://www.fypower.org/. 
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listing of each demand response program and product being offered, peak demand impacts 

from demand response, costs of the programs, and participation rates. One useful way to 

organize these data would be by utility, load-serving entity, state, and RTO/ISO.

Recently, FERC has been collecting some of this information through its survey of demand 

response programs. The results of this publicly available survey provide the basis of FERC’s 

Assessment of Demand Response and Advanced Metering reports.74 Additionally, the North 

American Electric Reliability Corporation (NERC) collects related data at the wholesale level 

and recently initiated an effort to improve its demand response data collection 

methodology.75

In addition to quantitative data, the clearinghouse could also collect detailed qualitative 

information. For example, the clearinghouse could provide a profile of the regulatory 

environment in which the programs are being offered, showing whether the demand 

response program is implemented in a state that has rate decoupling and whether the demand 

response program is being driven by the utility, regulatory commission, RTO/ISO, other 

demand response provider, or other party. Another example is information on the variations 

in RTO and ISO demand response, such as what requirements the provider must meet in 

order to bid and the incentives to participate. Other helpful qualitative information could 

include the amounts and types of demand response being incorporated into transmission 

planning and resource planning, a summary of marketing and customer recruitment efforts, 

and key lessons learned.

 The results of these efforts would be included as part of the Web-based 

clearinghouse. 

The clearinghouse could also include or provide linkages to quantitative and qualitative 

information on demand response developed by other entities. For example, EPA could share 

information to help states and other stakeholders understand the potential effects demand 

response may have on emissions.

Measuring Program Results with Criteria and Metrics

The wide variety of demand response programs across the country leads to wide variation in 

the reports on the results and lessons learned. The Web-based clearinghouse should include 

criteria and metrics that help stakeholders understand and evaluate these reports, make 

informed judgments about the results the reports present, and make meaningful comparisons 

across the reports. For example, principles of pilot program design — internal and external 

validity, control and treatment groups, selection of participants, measurement of load and 

other data, and payment or other incentives—would be valuable to clearinghouse users. 

 

74 Assessment of Demand Response and Advanced Metering, supra note 18.

75 NERC, Data Collection for Demand-Side Management for Quantifying Its Influence on Reliability: 

Results and Recommendations (2007). 
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Information for Program Implementation

The Web-based clearinghouse should provide information for stakeholders interested in 

implementing their own demand response programs. Unlike case studies and pilot results, 

which consider historical events and remain static, the information for program 

implementation could be updated with the results of case studies, pilot results, and utility 

smart grid and demand response business cases to highlight current and future issues in 

program design and implementation. Information would be provided on how to implement 

both dynamic rate design and non-rate-based demand response programs. The clearinghouse 

also should include information on available smart grid technologies, which will play a 

crucial role in demand response implementation.

A stakeholder must consider many options if planning to implement demand response using a 

dynamic rate.76

The clearinghouse would provide non-rate-based demand response information as well. For 

example, when designing direct load control programs, it is important to consider how signals 

will be sent to the load control devices. Furthermore, the devices can be both one-way (i.e., 

only receiving the signal to be controlled) or two-way (i.e., the device receives the signal to 

be controlled and sends a signal back to the dispatcher confirming receipt). The duration and 

frequency with which the controlled devices cease to operate are another example of useful 

information in this context.

 The Web-based clearinghouse would provide information on options for 

both the dynamic rate selection and its specific design. For example, the strength of the price 

signal to customers (i.e., the differential between the peak and off-peak prices) indicates to 

the customer the magnitude of the incentive to reduce consumption when the price is high 

and relates to the customer’s opportunity for significant bill savings. Program enrollment and 

peak reductions likely are dependent on the opportunity for bill savings. Finally, the 

complexity of the rate design will play an important role in a customer’s ability and 

willingness to respond to a dynamic rate.

The foundation of much of this type of information is publicly available through filings with 

state commissions. However, there is no central location for easily locating the most up-todate materials on demand response program implementation and design stemming from prior 

efforts. Therefore, a coordinated effort to collect and organize these data, beginning with a 

comprehensive assessment of the data that are already available, would facilitate discussion of 

the issues facing stakeholders who are currently designing and implementing their own 

demand response programs.

 

76 For more detailed information on dynamic rate design see, for example, Faruqui A, Hledik R, 

“Transition to Dynamic Pricing,” Public Utilities Fortnightly (March 2009), and Faruqui A et al., 

Rethinking Rate Design Demand Response (2007) (issue paper prepared for the Demand Response 

Research Center, Lawrence Berkeley National Laboratory). 
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Online Message Board Capability

In addition to serving as a central location for demand response reports and resources, the 

Web-based clearinghouse also should serve as an online message board where qualifying state 

agencies (e.g., state regulatory commissions, state energy offices), consumer advocacy groups, 

and utilities may ask for specific virtual or onsite demand response assistance with regard to 

program design, implementation, and/or evaluation. In conjunction with the demand 

response assistance program discussed in Section 2.1, experts could review the message board 

posts and offer assistance. The nature of this assistance might involve referring a caller to a 

website, providing applicable reference materials, or perhaps providing onsite technical help 

(for a day, a week, or longer).

Information About the Development of Standards and Protocols

The development of standards and protocols is important for creating an interoperable 

electric grid. However, because other organizations have already taken the lead in 

developing standards and protocols, the Coalition could oversee the tracking of the standards 

development process. Up-to-date information on progress in the standards development 

process would be made available through the Web-based clearinghouse.

The National Institute of Standards and Technology (NIST) has established a process and plan 

that are designed to establish smart grid interoperability standards per its mandate from 

EISA.77 NIST has allocated $5 million of its Recovery Act funding for this purpose.78 Over 

the past year, NIST launched the initial stages of its broad effort, including creating Domain 

Expert Working Groups (in conjunction with DOE) to concentrate on focus areas and 

developing an Interoperability Knowledge Base to promote shared understanding and 

terminology.79

There are many examples of standards and protocols that could be developed to support

demand response. These include communication protocols for consumer demand 

information, data privacy and cyber-security standards, standards for plug-in hybrid electric 

vehicles and fully electric vehicles, and measurement and verification standards.

 In addition, the North American Energy Standards Board (NAESB) and NERC 

have already undertaken standard and protocol efforts for the smart grid. The Coalition 

should design the Web-based clearinghouse to allow interested persons to track these efforts 

to develop standards and protocols, perhaps through coordination with the NIST Smart Grid 

Interoperability Panel. 

Standard communication protocols would allow information on electricity demand and prices 

to flow unimpeded from consumers to a utility, demand response provider, or wholesale 

market operator. All transmitted information also should be readily available to consumers, 

 

77 More information and a summary of recent activity can be found at http://www.nist.gov/smartgrid/. 

78 See id. 

79 See id. 
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because these signals (which traditionally came in the form of calling or paging facility 

managers) instruct customers to reduce their load in response to market prices or grid 

reliability concerns. Current technology, such as the automated demand response program, 

allows system operators and utilities to interact directly with commercial and industrial 

facility control systems that are pre-programmed to take action based on a demand response 

signal, without manual intervention.80

Demand response activities will generate a significant amount of new data about consumers’ 

actions and energy usage. Protocols would be developed for the appropriate protection of this 

information, including standards for the entities that should, or may, have access to this 

information and specific conditions for accessing this information. Furthermore, it will be 

crucial for all newly generated data to be transmitted over secure lines of communication 

between system operators and demand response providers. Establishing a secure and open 

standard for the transmittal of private consumer data in addition to sensitive information 

relating to the overall electrical grid would be a significant step forward for states, utilities, 

other load-serving entities, and customers looking to invest in demand response products or 

other enabling technologies.

 Standardizing demand response signaling could make 

it easier for facilities to respond to calls for load reductions and management, and thus 

potentially increase the amount of customer participation in demand response programs and 

products. An example of such a standard could be the Open Automated Demand Response 

(OpenADR) specification, developed by the Demand Response Research Center. OpenADR 

provides a standardized demand response communications and signaling infrastructure using 

open, industry-approved data models.

Nationwide standards for charging stations for PHEVs and electric vehicles also should be 

adopted.81

Finally, development of measurement and verification standards is critically needed at both 

the wholesale and retail levels. Methods for measuring and verifying demand response 

reductions currently vary significantly across the country, and measurement and verification 

 These charging stations should have appropriate communications, metering and 

electric flow control, and standardized plug interface. These actions would facilitate the use 

of PHEV and electric vehicles for their variable storage potential to provide ancillary services 

to the electric grid. Nationwide standards would also reduce barriers to interoperability, such 

as the need to develop PHEVs and electric vehicles that meet standards that vary state by 

state.

 

80 See Lawrence Berkeley National Laboratory, Open Automated Demand Response Communication 

Specification (Version 1.0), (2009), available at http://drrc.lbl.gov/openadr/pdf/cec-500-2009-

063.pdf (prepared for the California Energy Commission, Public Energy Research Program). This 

report “outlines a communications exchange signals specification to enable demand response in enduse participant or customer systems.” 

81 For instance, SAE International has released a standard that provides a standard interface between 

plug-in hybrid and battery-electric vehicles and electrical charging systems. See SAE International, 

New SAE International Standard Defines Electric-Vehicle Charging Coupler (2010), available at

http://www.sae.org/servlets/pressRoom?OBJECT_TYPE=PressReleases&PAGE=showRelease&RELEASE

_ID=1141. 
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standards will increase confidence in markets. Efforts to standardize measurement and 

verification are already underway. NAESB is currently leading an effort that has produced a 

document describing model business practices for the measurement and verification of 

demand response.82

Develop or Enhance Demand Response Estimation Tools and Methods 

 NAESB is also working with NERC to ensure that NERC’s demand 

response data collection effort conforms to a consistent measurement and verification 

standard. NERC’s Demand Response Data Task Force is charged with developing a systematic 

approach for collecting and disseminating data on demand response programs, products, and 

services administered by retail and wholesale entities throughout North America. The efforts 

of NAESB and NERC should provide valuable tools and standardization to ensure that 

demand response is accurately measured and verified.

Purpose Determine the potential value and benefits of demand response solutions. 

Assess whether demand response solutions deliver value and benefits once 

deployed.

Expected 

Outcome

A set of tools and methods provided to regulators, operators, utilities, loadserving entities, other demand response providers, and consumers for 

conducting simulations, analyses, and evaluations of demand response 

programs that will lead to more cost-effective programs and optimal 

participation by consumers.

Analytical tools and methods would be developed or enhanced to: 1) help in the expansion of 

existing demand response programs and creation of new programs by valuating each 

program’s benefits and costs; 2) advance the use of demand response to support reliable and 

efficient operations of wholesale transmission, energy, capacity, and ancillary services 

markets; and 3) better enable end-use consumers to optimize savings, possibly through 

automation, while enrolled in a demand response program.

The Coalition or the federal agency could oversee assistance to organizations that are 

developing or enhancing tools and methods. These organizations would begin by identifying 

well-established tools and methods already being used to evaluate program impacts and costeffectiveness. Next, organizations would consider how these tools could be enhanced or 

consider areas where the development of additional tools would be beneficial. To do this, 

organizations should engage in new research identifying beneficial characteristics of existing 

tools or meet through conference venues to foster information-sharing on current successful 

examples. Based on the outcomes of either of these options, projects to modify existing tools 

and methods or develop new ones would be identified. The Coalition could help identify 

options such as the degree of customization. For instance, it might be better that some tools 

be developed at a generic level and then customized at user expense, while other tools include 

pre-developed options that allow users to customize them without additional expense.

 

82 NAESB, M&V for Demand Response Programs (2009), available at

http://naesb.org/pdf4/dsmee_group2_070709reqcom_attach.doc. 
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These tools and materials would be tailored to circumstances in wholesale and retail markets, 

as well as restructured and nonrestructured markets with vertically integrated utilities, so as 

to capture the differing sets of incentives and rules for pursuing demand response. For 

instance, tools for analyzing retail demand response programs must reflect that these 

programs are run through load-serving entities or other demand response providers, and that 

consumers are usually faced with a tariff or contractual obligation for participation in demand 

response programs. Conversely, tools for analyzing wholesale demand response programs 

must be built to reflect that participants are bidding resources into a market, possibly setting 

the RTO’s locational price.

In addition to helping support full utilization of demand response resources in deployment, 

these tools and methods also could be structured to support energy efficiency programs. This 

could be achieved by making the tools and methods more flexible and not focused solely on 

demand response. In particular, the tools and methods could include the option to calculate 

the impacts, benefits, costs, etc., of utilizing more energy-efficient equipment. The 

integration of energy efficiency with demand response in the creation of tools and methods 

will advance the objectives of both types of demand side resources.

The following subsections suggest the types of tools and methods that could be developed to 

support demand response.

System Impact Estimation and Prediction Tools

System impact estimation and prediction tools are important because they allow stakeholders 

and policymakers to estimate the effects of demand response programs, products, 

technologies, and incentives on system resource requirements, wholesale prices, and 

emissions of carbon dioxide and other air pollutants before spending money on pilots and/or 

full implementation. For some types of demand response programs, baseline predictions on 

consumer demand would need to be calculated. Tools and methods for conducting these 

calculations should be developed. 

Tools that can analyze some aspects of potential demand response impacts already exist. As 

part of the resource planning process, most utilities and ISOs/RTOs operate capacity 

expansion models through which demand response and energy efficiency measures can 

“compete” with supply-side resources to determine the optimal mix of resources for the 

system. In this case, the federal agency or the Coalition should facilitate a deeper 

understanding of how demand-side programs can be accurately integrated into what

traditionally have been more supply-side-centric modeling frameworks. 

Additionally, through the National Assessment, FERC staff developed a tool for estimating 

the state-level potential for demand response under a variety of scenarios.83

 

83 The model is available at 

 This tool was the 

http://www.ferc.gov/industries/electric/indus-act/demand-response/drpotential.asp. 
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basis for the estimates of demand response potential provided in the National Assessment and 

has served as a valuable starting point for individual states and other entities to conduct more 

detailed and tailored assessments of their own.

To support the National Action Plan and bridge the gap between estimates of demand 

response potential and existing capacity expansion plans, FERC staff is in the process of 

developing a quantitative estimation tool that, given a capacity expansion plan, will yield 

information on plant dispatch and energy margins, reserve margins, and unused supply. For a 

brief description of the tool under development, see Sidebar 3 at the end of this section. 

The InterAct tool, developed by Pacific Gas & Electric Company, is an example of an existing 

demand response tool that has been developed for customers. This free online tool is 

available to any large customer (200 kilowatts [kW] or greater) with 15-minute-interval load 

shape data and temperature readings to guide decisions related to demand response. 

InterAct’s Energy and Cost Analysis module provides customers with tools to create graphs 

and charts, conduct statistical analyses, and export data. These options allow the consumer to 

closely track and understand their electric demand and usage. This tool helps consumers 

optimize their participation in demand response programs by notifying them of events via 

multiple media, allows consumers to easily accept or decline a curtailment notice, and gives

consumers actual demand reductions and incentive payments after the event day.84

Another example comes from the Building Energy Software Tools Directory.85 The Demand 

Response Quick Assessment Tool, developed by Lawrence Berkeley National Laboratory, 

helps commercial customers predict energy and demand savings for various demand response 

strategies. It allows users to run simulations based on a set of assumptions and variables.86

A final example of an analysis tool comes from the Rocky Mountain Institute (RMI). RMI 

developed a dispatch model of what it calls the Next Generation Utility.87

 

84 For more information about the InterAct tool, visit 

 The model is 

designed to provide insight on the potential of specific dispatchable demand response 

resources and technologies (e.g., for air conditioning, lighting, and plug loads) to reshape the 

load profile to better match renewable output. RMI’s modeling focus has been on analyzing 

the combined effects of these resources in an electric system with high penetrations of wind 

and solar energy. The capabilities of the dispatch model with respect to demand response are: 

modeling traditional load-curtailment demand response; modeling thermal storage strategies 

http://www.pge.com/mybusiness/energysavingsrebates/demandresponse/tools/. 

85 DOE developed this directory because its Office of Building Technology, State and Community 

Program develops software tools to help researchers, designers, architects, engineers, builders, code 

officials, and others involved in the building life cycle to evaluate and rank potential energy efficiency 

technologies and renewable energy strategies in new or existing buildings. To learn more about the 

directory and tools, visit http://apps1.eere.energy.gov/buildings/tools_directory/. 

86 To learn more about the Demand Response Quick Assessment Tool, visit 

http://apps1.eere.energy.gov/buildings/tools_directory/software.cfm/ID=522/pagename=alpha_list. 

87 For more information about RMI’s dispatch model, visit http://ert.rmi.org/research/next-generationutility.html. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

70 Part 2: Strategies and Activities

such as ice storage and pre-cooling buildings to analyze consumer savings and electric system 

impacts; and analyzing driving and charging patterns for fleets of plug-in vehicles. RMI is 

also incorporating the hourly dispatch methodology into an integrated system planning tool 

for utilities and regulators to use for modeling the financial and operational characteristics of 

future scenarios. This expanded functionality will include modeling the impacts of investing 

in demand response along with renewables to minimize reliability concerns.
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Part 2: Strategies and Activities 71

Example: InterAct Tool

The InterAct tool provides summary statistics regarding usage and load.

The InterAct tool summarizes usage and demand data in graphical form with temperatures 

overlaid. 
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72 Part 2: Strategies and Activities

Example: Demand Response Quick Assessment Tool

The Demand Response Quick Assessment Tool has an interface that allows users to set 

the assumptions and variables associated with a building.

Results of the Demand Response Quick Assessment Tool simulation are presented 

graphically and textually for analysis.
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Part 2: Strategies and Activities 73

Example: RMI Dispatch Model

The RMI dispatch model illustrates how demand response can 

shift demand to times when renewable generators are 

producing power rather than dispatching expensive and 

inefficient quick-ramping generators.

The RMI dispatch model can simulate the capacity mix for 

alternative scenarios and resources.
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74 Part 2: Strategies and Activities

Cost-Effectiveness Tools

Determining the cost-effective mix of demand response programs is a central challenge to any 

demand response provider, regulator, or policymaker. Projections of long-term benefit 

streams (such as avoided resource costs), identification of relevant costs, and the accurate 

characterization of these costs are examples of the types of calculations that must be made in 

assessing a program’s cost-effectiveness. The creation of cost-effectiveness tools is essential to 

determining the most efficient mix of demand response programs for a given service territory 

or region.

Methods for evaluating the cost-effectiveness of demand-side management programs have 

been in use for many years. For example, the California Standard Practice Manual provides 

detailed guidelines for assessing the cost-effectiveness of demand side programs from several 

different perspectives.88

A tool to help retail electricity consumers assess the net financial benefits of participating in 

demand response programs would be valuable, particularly for commercial and industrial 

consumers. The Demand Response Quick Assessment Tool discussed earlier in this section is 

a step in this direction. Ideally, such a tool would use the best available information to show 

customers how their electricity bill would change if they were to participate in a given 

demand response program.

 The cost-effectiveness tests defined in the report are used by utilities 

and regulators across the United States and abroad. The federal agency or the Coalition could 

oversee and support efforts, such as national workshops or further research, to develop new 

methods or tailor existing methods for analyzing demand response.

A final example is a tool that aids load-serving entities, developers of variable resources, and 

transmission developers in assessing the value and cost-effectiveness of demand response as a 

resource. This may become especially important in carbon-constrained environments. Case 

studies of AMI business case filings should be placed in the previously discussed Web-based 

clearinghouse. Such filings exist for any utility that has sought regulatory approval for an 

investment in smart meters, and could guide cost-effectiveness analysis in a different region. 

Beyond case studies, a more detailed tool that would allow the user to customize analysis for a 

given set of system conditions and cost assumptions would further improve understanding of 

a given program’s potential cost-effectiveness. 

Decision Tools for End-Use Consumers

Decision tools are crucial to help end-use customers understand how to change their 

consumption patterns to achieve bill savings and provide system benefits while enrolled in a 

demand response program. The federal agency or the Coalition would oversee the 

identification of new tools that each customer class needs, as well as support the development 

of selected tools. These tools should draw on past experience and case studies to help 

 

88 CPUC, California Standard Practice Manual: Economic Analysis of Demand-Side Programs and Projects

(2002), available at http://drrc.lbl.gov/pubs/CA-SPManual-7-02.pdf. 
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Part 2: Strategies and Activities 75

customers in specific industries or with specific types of facilities (e.g., warehousing, health 

care, or retailing) select appropriate demand response providers, programs, and technologies. 

Some customers manage multiple facilities, each varying in size and relative location. 

Examples of such consumers include university campuses, national retailers, and federal or 

military sites. The development of demand response-related tools and plans to engage these 

existing customers with special circumstances may help achieve the maximum amount of 

demand response that can be developed and deployed.

Information in these tools would be updated as market, economic, and regulatory factors

change. 

Cost Recovery Tools and Methods for Enabling Technology

Tools and methods need to be provided to develop the business case and examine options for 

recovering costs of installing approved, cost-effective new technologies that enable demand 

response. Each cost recovery option should include an assessment of the impact on customer 

rates. Such tools could assist utilities and state and local governing officials that are 

considering demand response programs by providing important information on the financial 

impacts of each demand response investment. The federal agency or the Coalition could 

facilitate discussions between utilities and state and local governing officials so that they can 

learn best practices from each other with regard to cost recovery. 

For example, devices such as advanced meters and smart thermostats are essential for some 

demand response initiatives and can greatly increase the effectiveness of others. The 

installation of these devices requires investment from load-serving entities and/or customers. 

An appropriate method may be needed for utilities or load-serving entities to recover the 

costs they incur.

Tools and Methods for Incorporating Demand Response in 

Dispatch, Ancillary Services, Transmission, and Resource 

Planning

New tools and methods should be developed to directly incorporate demand response into 

dispatch algorithms and resource planning models. These tools and methods are important to 

better capture the capability of demand response to serve as an alternative to building new 

generation and transmission and to act as a resource to alleviate transmission congestion. 

FERC's Order No. 890 could be instructive in the development of these tools and methods. In 

Order No. 890, FERC stated that “where demand resources are capable of providing the 

functions assessed in a transmission planning process, and can be relied upon on a long-term 

basis, they should be permitted to participate in that process on a comparable basis.”89

 

89 Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. 

& Regs. ¶ 31,241, at P 479, order on reh’g, Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007), 

 The 
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76 Part 2: Strategies and Activities

Coalition or federal agency could oversee the development of research and tools examining 

ways to incorporate demand resources in these processes. 

Also needed are better methods to forecast and model the capability of demand resources to 

adjust consumption in near real-time. Finally, hardware and software tools that allow 

customer appliances or vehicles to autonomously provide reliability services, such as 

frequency response service, should be developed. 

Transparency of Price Information

For large customers and policymakers to make decisions about the types of economic and 

business opportunities available in demand response programs, they need access to real-time 

or near-real-time energy prices. Therefore, there is value in developing tools that provide 

access to real-time or near-real-time energy prices, ancillary service prices, capacity 

payments, and congestion costs. Access to transparent price information should also be 

provided to residential customers when feasible and cost-effective. 

To a certain extent, real-time pricing (RTP) programs already provide information to 

participants about the price of energy. Many utilities have websites that provide information 

about the next day’s hourly prices. However, additional means are often taken to alert 

customers about unusually high prices. In Commonwealth Edison’s residential RTP program, 

customers are alerted via e-mail or text message if hourly energy prices are about to exceed a 

pre-specified threshold. Other dynamic pricing programs will use similar means to convey 

information to customers about upcoming event days. However, customers do not always use 

these tools, and some are not aware that they even exist. The federal agency or the Coalition 

would oversee and support efforts to improve the effectiveness of tool design.

A different example of a tool for providing price information in an innovative way is the 

Energy Orb. The Energy Orb is a spherical glass lamp that emits different colors to signal offpeak, peak, and critical peak hours of the day. This is a visual aid that enhances a customer’s 

ability to respond to price signals. Several recent dynamic pricing experiments have used the 

Energy Orb in conjunction with dynamic rates to assess its impacts. The results have been 

somewhat mixed. In the California Statewide Pricing Pilot, the Energy Orb led to greater 

conservation and demand response impacts among residential customers.90 At Baltimore Gas 

& Electric Company, peak demand reductions increased from 18 to 21 percent without the 

Energy Orb to 23 to 27 percent when it was provided.91

 

order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 126 

FERC ¶ 61,228 (2009), Order No. 890-D, 129 FERC ¶ 61,126 (2009).

 However, Connecticut Light & 

Power’s recent pilot had different results: the Energy Orb did not provide any incremental 

90 Nexus Energy Software et al., Information Display Pilot (2005).

91 The Brattle Group, BGE’s Smart Energy Pricing Pilot: Summer 2008 Impact Evaluation, (2009)

(prepared for Baltimore Gas & Electric Company). 
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Part 2: Strategies and Activities 77

demand response benefits.92

Table 2

 Regardless, the device serves as an example of a tool that could 

be used to provide information about price signals to customers.

 provides a list of the strategies and activities described in the Draft National Action 

Plan. 

Table 2: Strategies and Activities

Requirements for Technical Assistance

• Establish a National Forum

• Conduct Informational and Educational Sessions for Policymakers and Regulators

• Build a Panel of Demand Response Experts

• Sponsor Technical Papers

• Establish a Program for Technical Assistance for Demand Response

• Provide Demand Response Grants

Requirements for National Communications Program

• Develop a Communications Umbrella 

o Program Development

 Compile Case Studies

 Identify Demonstration Program Sites

 Conduct Program Evaluation

o Message Framework Development

 Conduct Foundational Market Research

 Develop Adaptable, Consumer-Friendly Messages

 Position Demand Response as Part of Overall Smart Energy Use 

 Develop Communications Materials, Tactics, and Toolkits

 Develop Support Materials Tailored to Large Commercial and 

Industrial Customers

• Local Implementation 

o Support for Demonstration Programs

o Support for Other Demand Response Programs

• Direct Outreach to States, Policymakers, and Partners

o Communications Assistance to States and Policymakers

o Partnership Development

(Continued)

 

92 Connecticut Light and Power, Results of CL&P Plan-it Wise Energy Pilot, Docket No. 05-10-03RE01, 

Compliance Order No. 4 (2009).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

78 Part 2: Strategies and Activities

Table 2: Strategies and Activities (continued) 

Requirements for Tools and Materials For Use by Customers, States, and Demand 

Response Providers

• Develop a Web-Based Clearinghouse of Demand Response Materials

o Case Studies of State Laws, Regulations, and Tariffs

o Database of Pilots, Programs, and Markets

o Quantitative and Qualitative Summaries

o Measuring Program Results with Criteria and Metrics

o Information for Program Implementation

o Online Message Board Capability

o Information About the Development of Standards and Protocols

• Develop or Enhance Demand Response Estimation Tools and Methods

o System Impact Estimation and Prediction Tools

o Cost-Effectiveness Tools

o Decision Tools for End-Use Customers

o Cost Recovery Tools and Methods for Enabling Technology

o Tools and Methods for Incorporating Demand Response in Dispatch, 

Ancillary Services Transmission, and Resource Planning

o Transparency of Price Information
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Part 2: Strategies and Activities 79

Sidebar 3: The DRIVE Model

The National Assessment answered an important question about the level of demand 

response that could be achieved in the United States. It also raised new questions about 

the implications of achieving this potential. For example:

• How would demand response programs affect load during non-event hours?

• What changes in system operations might demand response require?

• How does demand response affect the need for new capacity? 

• How would carbon dioxide emissions change with demand response?

• Would these effects change with the introduction of additional smart grid programs?

• Ultimately, what is the dollar value (benefit) of these impacts?

To help answer such questions, FERC staff and The Brattle Group are currently developing 

the Demand Response Impact and Value Estimation (DRIVE) model. The DRIVE model 

estimates the impact of a portfolio of demand response and smart grid programs on 

system operations, using specific characteristics of a power system as inputs.

The DRIVE model is an example of one type of tool that could be created through the 

efforts of the National Action Plan. A simple user interface makes the model accessible to a 

broad audience, supporting the educational objectives of the National Action Plan. Its 

specific focus on demand response and smart grid programs makes it a useful complement 

to other tools that are available for assessing the system impacts of energy resources.

Preliminary work with the DRIVE model suggests that: 

• Modest amounts of demand response can lead to large benefits.

• Avoided capacity cost is a significant benefit.

• Very large reductions in peak demand can lead to the creation of a new peak, which 

can reduce potential benefits.

• The value of large peak reductions may be enhanced by a broader range of 

technologies and program offerings, the benefits of which may extend beyond 

avoided capacity and into other areas like avoided energy costs and reduced carbon 

dioxide emissions. 

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Appendix A: Research Gaps A-1

APPENDIX A : 

Research Gaps 

n developing a list of possible areas for further research, some potential resource and 

research gaps have been identified. Research topics to fill these gaps are listed below, 

organized by whether each topic relates more to social science93

Social Science Research Issues

research or technical issues. 

It will be the role of the federal agency and the Coalition, working with its members, to 

prioritize the topics, identify additional topics, and select a subset as candidates for further 

research. 

• Exploration of issues related to rate design, metering costs, and an analysis of 

customer response to time-varying prices in successful programs.

• How the participation rate and demand impacts vary depending on whether the 

demand response rate design is required by law or regulation (e.g., as the default 

rate) or if customers voluntarily sign up for it. 

• Estimates of customer price sensitivity by type and class of customer.

• The short run price elasticities from pilot demand response programs are results that 

originate in a few states (and Canadian provinces); investigate whether these results 

are applicable to other areas, and also investigate how results would change over the 

long run (i.e., whether they would be higher because of equipment purchase 

decisions favoring storage and battery technologies or lower because of lack of 

persistence). 

• Investigation of typical demand response participation rates and how these rates 

vary based on program design parameters, marketing strategy, customer type 

(residential, commercial, and industrial; gender and income level), and customer 

profile (e.g., age, geographic location). Also, investigation into the non-price 

response incentives that motivate customers to participate in demand response 

programs and products.

• Exploration of the effectiveness of demand response when critical days are sustained 

for multiple days in a row and the persistence of demand response behavior when 

programs and products are implemented over a long-term time horizon.

 

93 Social science research focuses on customer interest in demand response and how customers change 

their consumption or behavior in response to demand response programs or dynamic pricing.

I
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A-2 Appendix A: Research Gaps

• Understanding how consumers shift demand to off-peak hours of the day and if 

consumers take conservation measures to lower peak demand over all hours of the 

day, not just during peak hours. 

• How demand response programs compare with energy efficiency programs in terms 

of cost-effectiveness and demand reduction efficacy. 

• Identification of the most cost-effective demand response programs for customers 

who do not have advanced metering infrastructure.

• Impacts of customers participating in multiple demand response programs. 

• Research on electricity use by home office workers.

• Research on effective gender-based, age-based, and race/ethnicity-based messages. 

• Research to identify “discretionary use” appliances — i.e., appliances whose

operations can easily be scheduled for off-peak times. 

• Usage of environmentally oriented feedback information, such as carbon content, to 

motivate behavior change.

• Impacts and benefits to low-income consumers.

Technical Research Issues

• Relative benefits and costs of various types of demand response programs, products, 

technologies, and incentives, covering such topics as the various types of benefits, 

potential costs, and payback horizons associated with each. 

• Better understanding of the optimal amount of consumer versus demand response 

provider control of appliances.

• An analysis of the environmental effects of demand response, such as: an estimate of 

emissions mitigation when considering load reduction versus load shifting; an 

assessment of the potential for demand response to assist in the integration of 

variable resources such as renewable energy; and a calculation of environmental 

benefits stemming from the reduced need to build new generation capacity and 

transmission systems.

• A study of how long demand response resources can be expected to provide resource 

adequacy and reliability benefits compared with other resources, such as generation, 

transmission, and storage. 

• A study of how demand response resources can be dispatched to support and balance 

variable generation from renewable energy.
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Appendix A: Research Gaps A-3

• A study of how plug-in hybrid electric vehicles interact with demand response 

programs, examining whether demand response rate design provides a price signal 

that encourages PHEVs to charge during off-peak hours, as well as how different 

demand response pricing mechanisms interact with PHEVs and their net impacts on 

how demand for electricity might change.

• Research into the appropriate codes and standards (e.g., building codes, consistent 

definitions, performance standards) for demand response, considering whether they 

will be mandated at the federal or state level; whether they are mandatory or 

voluntary requirements; how they will be complied with and enforced; and how the 

costs involved in their development, compliance, and enforcement will be paid for. 

Integration of the many utility and third-party programs, devices, and software 

applications needs to be taken into consideration. 

• Advanced metering topics such as estimating initial costs, methods used to recover 

costs, calculating time to payback, the functionality of the devices, and dealing with 

swift technology advancement.

• Smart metering for residential customers, covering topics such as categories and 

characteristics of various smart metering systems, cost-effectiveness, setting up the 

communications and database, customer awareness, access to data, retrofitting 

existing meter connections with smart technology, and consumer protections.

• Implementation of demand response programs and products at government-owned 

campuses, covering topics such as the types of demand response suitable for 

government customer applications, barriers and lessons learned from existing 

programs, percentages of the state electricity portfolio under municipal, county, 

state, and federal control, and the potential impact of incorporating government 

loads into demand response programs and products.

• Ensuring smart grid cybersecurity, system reliability, and systems interoperability, 

especially considering the massive amounts of data that could be transferred 

between customers and utilities and other demand response providers. 

• An assessment of the job skills and training needed to successfully deploy demand 

response programs, products, technologies, and incentives.

• Best strategies to coordinate retail demand response programs with RTO/ISO 

demand response programs for organized power markets.

• A study of the benefits of a national demand response policy, including reliability, 

efficiency, economic and environmental benefits, and benefits related to consumer 

savings; the increased ability to integrate variable generation; and the increase in 

potential competitive sources of ancillary services.
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A-4 Appendix A: Research Gaps

• Economic and reliability impacts of PHEVs as they penetrate the market.

• Exploration of the effectiveness of various types of in-home displays.

• Exploration of impacts that the battery life of various home area network devices 

and in-home displays will have on residential participation in demand response 

programs. 

• Exploration of impacts on appliance/electronics longevity that are cycled on/off by 

demand response programs.

• Research consumer willingness to sell back energy from micro-generation and home 

storage to offset peak periods.

• Best strategies to maximize deployment of demand response potential for states with 

specific programs or needs, taking into account electric demand profile, generation 

mix, preferred type of demand response programs and products, regional trends, 

stakeholder views, and previous assessment research.

• Curtailable load programs aimed at industrial customers, covering topics such as 

potential benefits to all customers, cost recovery, rate design, and program 

marketing.

• The relationship of demand response to other state energy initiatives (e.g., energy 

efficiency, renewable energy, smart grid). This research would explore how demand 

response overlaps or complements these other initiatives and where management 

and oversight could be leveraged or combined.

• Understanding the interest of elected officials, regulatory agencies, utilities and 

load-serving entities, RTOs/ISOs, other demand response providers, and third-party 

vendors in making demand response a priority.

• The ability to integrate large-scale renewable energy resources and electric vehicles, 

which is critical to advance the benefits of demand response.

• The impact of distributed generation as a resource that can be integrated more 

effectively in conjunction with demand response.

• An assessment of the location impacts of demand response. 

• A study that identifies the load and peak demand profiles of the electricity control 

areas. 
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Appendix B: Examples of Demand Response Programs B-1

APPENDIX B : 

Examples of Demand 

Response Programs

his appendix presents a few examples of demand response retail and wholesale programs 

around the United States. To put these case studies in context, Figure 5, which is taken 

from the National Assessment, shows the regional variation in the national potential for 

demand response. 

Figure 5: Regional Demand Response Potential

T
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-2 Appendix B: Examples of Demand Response Programs

Retail Programs

Arizona

Arizona is a state with vertically integrated investor-owned and publicly owned utilities. It 

has very hot summers that bring with them a large reliance on central air conditioning. To 

curtail growth in peak loads, the two major utilities — the Arizona Public Service Company 

and the Salt River Project — have offered time-of-use (TOU) pricing programs to their 

residential customers for more than two decades.94 During this time, they have attracted 

some 30 to 40 percent of the residential market.95 For example, the Salt River Project has 

more than 222,000 TOU customers, or about 25 percent of its electric customers, which is the 

third-largest TOU initiative in the United States.96 Typical TOU customers on this program 

lower their bill by 7 percent.97

This case study indicates that even without enabling technologies, significant customer 

participation can be achieved in time-based rates if they are well-designed and marketed, and 

that these rates can successfully lower peak demand for many years. 

 What is noteworthy is that these effects were obtained 

without the intervention of enabling technologies. 

California

California is a leader in exploring and expanding demand response. For instance, the 

California Energy Commission issued regulations instituting mandatory TOU pricing for large 

commercial and industrial customers in 1978. In addition, regulations for appliance and 

building energy consumption98 are a major reason that per capita electricity use in California

has stayed constant during the past three decades, while the per capita consumption in the 

United States has grown appreciably.99 Later, during the western energy crisis of 2000–2001, 

California developed an Energy Action Plan that specified a loading order of resources: first, 

energy efficiency; second, demand response; third, renewable energy sources; and finally, 

conventional generation options.100

 

94 More information about these programs can be found at 

http://www.srpnet.com/prices/home/tou.aspx (Salt River Project) and 

http://www.aps.com/aps_services/residential/rateplans/Default.html (Arizona Public Service 

Company).

95 eMeter, Demand Response: An eMeter White Paper Presentation (2008).

96 Salt River Project, Navigating Change: SRP 2009 Annual Report, at 7 (2009), available at

http://www.srpnet.com/about/financial/2009AnnualReport/siteassets/pdfx/2009SRPAnnualReport.pdf. 

97 Id.

98 Cal. Code Regs. tit. 20, §§ 1601–1608 (2009) (efficiency standards for appliances); Cal. Code Regs. 

tit. 24. 

99 California Energy Commission, 2007 Integrated Energy Policy Report, at 3–4 (2007).

100 State of California, Energy Action Plan, at 4 (2003).
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Appendix B: Examples of Demand Response Programs B-3

The Energy Action Plan also set a target reduction in peak demand of 5 percent for 2007.101 

When California’s three investor-owned electric utilities only achieved 40 percent of that 

target in 2007, they were asked to revamp their efforts. Simultaneously, the California Public 

Utilities Commission (CPUC) approved business cases for the deployment of advanced 

metering initiatives (AMI) by all three utilities102 and then issued a landmark ruling making 

dynamic pricing the default tariff for all nonresidential customers who were part of AMI. In 

addition, California operates the “Flex Your Power” campaign to promote customer awareness 

of pending energy shortages and to encourage them to curtail energy use.103

California also carried out the nation’s first comprehensive test with dynamic pricing, known 

as the Statewide Pricing Pilot, which involved approximately 2,500 residential and small 

commercial and industrial customers.

 This program has 

achieved very high levels of brand recognition because it is featured in a number of 

prominent places such as billboards, train stations, and websites, as well as on postmarks.

104 The results of the Statewide Pricing Pilot provided 

information about the likely amount that customers would lower their peak demand at 

different price levels, both with and without enabling technologies.105 In addition, a large 

number of participants elected to continue on the experimental rates despite a new metering 

charge, indicating that participants were satisfied with the experimental rates.106

This case study indicates that if a state makes a strong commitment to dynamic pricing, it can 

achieve a significant reduction in peak demand; that enabling technologies can further boost 

impacts; and that by making demand response the default option, large numbers of customers 

can be induced to participate in demand response. 

 Overall, the 

experiment showed that if customers are fully informed, they are more likely to participate in 

dynamic pricing programs.

Connecticut

The Connecticut legislature passed legislation that required electric distribution companies to 

conduct integrated resource planning beginning on January 1, 2008.107

 

101 Id.

 The identified 

resource needs must first be met through all available energy efficiency and demand 

102 See, e.g., Pacific Gas & Electric Company, Decision Adopting Dynamic Pricing Timetable and Rate 

Design Guidance for Pacific Gas & Electric Company, D. 08-07-045 (2008).

103 For more information about the Flex Your Power campaign, visit http://www.fypower.org/. 

104 For more general information about the pilot program and its results, see Charles River Association, 

Impact Evaluation of the California Statewide Pricing Pilot (2005), available at

http://sites.energetics.com/madri/toolbox/pdfs/pricing/cra_2005_impact_eval_ca_pricing_pilot.pdf. 

105 See id. 

106 San Francisco Community Power, Statewide Pricing Pilot — Track B End of Pilot Focus Group Results 2

(2005), available at http://www.sfpower.org/SFCP_TrackB_FocusGroups.pdf (finding strong statistical 

support that customers wanted to remain on the critical peak pricing rates).

107 Conn. Gen. Stat. § 16a-3a (2008).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-4 Appendix B: Examples of Demand Response Programs

reduction resources that are cost-effective, reliable, and feasible.108 Among other things, the 

electric distribution companies’ procurement plans must specify the amount of demand-side 

measures, such as demand response, that can meet the capacity planning needs.109

In summer 2009, Connecticut Light & Power ran a pilot program for demand response to 

discover how to most effectively reduce electricity usage during peak periods when demand 

for electricity reaches a critical level.110 Data from this program have been analyzed, and the 

results have led to a number of conclusions about customer response to prices, both with and 

without various enabling technologies.111

This case study indicates that legislation can be passed that encourages the use of demand 

response. It also shows how pilot programs are being implemented.

Delaware

Legislation in Delaware requires Delaware Power & Light to conduct integrated resource 

planning, commencing December 1, 2006.112 This biennial resource report requires Delaware 

Power & Light to project a 10-year supply and demand forecast. Additionally, Delaware 

Power & Light must propose the resource mix to meet its long-term obligations over the 10-

year period, including the use of demand-side management programs.113

This case study is an example of legislation that has been passed to encourage the use of 

demand response for integrated resource planning.

Florida

In the panhandle of Florida, Gulf Power, a subsidiary of Southern Company, has been 

operating the Energy Select (formerly known as the Good Cents SELECT program) since the 

early 1990s.114 This program includes an automated energy management system for homes 

that comes with a critical-peak pricing (CPP) tariff. The average rate is around 8 cents per 

kilowatt-hour, and the CPP tariff applied during the top 1 percent of the hours is four times 

higher.115

 

108 Id., § 16a-3a(c).

 The system controls four end-uses: air conditioning, space heating, water heating, 

109 Id.

110 Connecticut Light and Power, Plan-It Wise Energy Program, http://www.clp.com/home/saveenergy/goinggreen/planitwise.aspx ( 2009).

111 “CL&P Energy Program Pilot Customers Respond to Price Signals,” Transmission & Distribution World

(2010), available at http://tdworld.com/customer_service/clp-energy-program-20100101/. 

112 Del. Code Ann. tit. 26, § 1002(4) (2009).

113 Id. 

114 Gulf Power, Energy Select (2009), http://www.gulfpower.com/energyselect/index.asp. 

115 Gulf Management Company, Good Cents SELECT: Advanced Energy Management Program, at slide 6 

(2006), available at http://www.ewh.ieee.org/r3/nwflorida/presentations/01_19_06.ppt. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix B: Examples of Demand Response Programs B-5

and swimming pool pumps. Some 8,000 customers subscribe to the program and save up to 

15 percent on their monthly energy bills after paying a monthly fee of about $5 a month.116 

Gulf Power estimates that the program induces a drop of 2 kW per participating customer, 

amounting to approximately 40 to 50 percent of customer load during the top 1 percent of the 

hours of the year.117

Florida Power & Light’s (FPL’s) demand response program, “On Call,” is one of the largest 

load management systems (LMSs) in the nation. At the end of 2008, FPL's goal was to 

provide 973 MW of load control during times of high demand on its system. The system uses 

more than 900,000 load control transponders connecting more than 780,000 users, and the 

load control capability is 984 MW. FPL uses a power line communications system that offers 

many control strategies enabled by a two-way communications feature. When managed 

effectively, this system can be an attractive economic alternative when compared with the 

total cost of adding new peak load power generating plants.

 The program is generating interest among other Florida utilities as well. 

One utility is running a pilot to test customer acceptance and response. The pilot is being 

closely tracked by the other utilities. 

An essential element of the success of the program is keeping customers enrolled in the 

program and maintaining the equipment in the field to ensure that the system delivers the 

demand reduction that is expected by the system operators. About 1.5 percent of the 

customers who have the LMS field equipment installed in their home call the customer care 

center with questions. These calls can be as simple as a request to add additional appliances to 

the load control program, although in other cases, customer service representatives may have 

to respond to a customer's perception that their participating appliances failed because of the 

installed LMS equipment. Employees specially trained in LMS (including a basic electrical 

knowledge of air conditioning, water heaters, and pool pump operation/wiring) help reduce 

customer dropouts from the system and ensure continued customer participation.

FPL customers benefit from the On Call load control program because it allows FPL to 

maintain a consistent supply of power generation during times of peak demand. The demand 

reduction enabled by On Call customers has helped keep electric rates low by deferring the 

need to build three power plants since the program’s inception, which also helps protect the 

environment.118

This case study indicates that dynamic pricing coupled with enabling technologies can bring 

about substantial savings to both the utility and the customer. 

 

116 Id.

117 Thompson J, Gulf Power, Presentation for the Southeast Energy Efficiency Meeting, at 14 (2007), 

available at http://www.epa.gov/RDEE/documents/southeastmeeting/thompson_southeast_energy_efficiency_meeting_atlanta_ga.pdf (discussing real-time 

pricing and the Good Sense SELECT program at Gulf Power).

118 E-mail from Julie Kreafle, Manager, Product Marketing, Florida Power and Light Company, to Ahmad 

Faruqui (Sep. 16, 2009, 9:47 PM ET) (on file with The Brattle Group).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-6 Appendix B: Examples of Demand Response Programs

Georgia

Since the mid-1990s, Georgia Power has operated the nation’s largest real-time pricing 

program directed at large commercial and industrial customers.119 Its current subscribers 

include approximately 1,200 medium to large industrial and commercial customers (greater 

than 250 kW), amounting to more than 4,000 MW of summer peak demand.120 Most of the 

customers participate in the day-ahead program, in which they receive information on the 

next day’s hourly prices on the afternoon of the previous day. About 100 of the largest 

industrial customers participate in an hour-ahead program, in which customers receive a dayahead forecast of hourly prices, but only an hour’s notice of the firm price in the next hour. 

Customers are offered a variety of price protection products to shield them from price 

volatility. They can chose the combination of risk exposure that best matches their attitudes 

toward risk and their ability to adjust their operations in response to variations in the price of 

power. The maximum load reductions on the moderate price day are approximately 4 

percent for day-ahead customers and 10 percent for hour-ahead customers. On the highprice day, estimated load reductions rise to 7 percent for day-ahead customers and 30 percent 

for hour-ahead customers.121

This case study indicates that real-time pricing is feasible and cost-effective for medium and 

large commercial and industrial customers and that well-designed programs can recruit large 

numbers of participants to real-time pricing in this market segment. It also shows that price 

protection and other risk management products may feasibly be included in demand response 

programs. 

Illinois

In June 2006, Illinois legislation enabled real-time pricing.122

To implement real-time pricing, each electric utility was required to install a meter that is 

capable of recording hourly intervals of energy use for each customer that elects real-time 

pricing. In addition, each utility was entitled to recover incurred costs in implementing real-

 Each electric utility servicing at 

least 100,000 customers was required to file a tariff allowing residential customers to elect 

real-time pricing by January 2007. In setting the tariff, each electric utility was required, at a 

minimum, to describe its methodology and the manner in which real-time customers would 

have access to hourly and day-ahead prices. 

 

119 O’Sheasy M, “How to Buy High and Sell Low: Spot Priced Electricity Offers Financial Rewards,” Pricing 

in Competitive Electricity Markets 295 (2000).

120 Braithwait S, Evaluating Changes in RTP Price Response — The Effect of Market and Environmental 

Conditions, prepared for the International Energy Program Evaluation Conference Proceedings in New 

York (2005).

121 Id.

122 2005 Ill. Laws 977 (amending 220 Ill. Comp. Stat. Ann. 5/16-101A, 16-102, 16-107).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix B: Examples of Demand Response Programs B-7

time pricing. These costs were imposed on all customers — those who elected to participate

in a real-time pricing rate and those who did not. 

At the end of 2007, the first full year required under the law, Commonwealth Edison had 

3,334 and Ameren had 500 active participants in their respective residential real-time pricing 

programs. In that year, average bill savings for all participants in the Commonwealth Edison 

program was about 13 percent.123 Ameren participants, on the other hand, had a total savings 

of 16 percent compared with what the same bill would have been under the flat rate.124

By the end of 2008, Commonwealth Edison and Ameren had increased their enrollments to 

5,838 and 3,147 active participants, respectively, though average bill savings fell to 2.5 

percent for all participants in the Commonwealth Edison program125 and 9 percent in the 

Ameren program.126

This case study indicates that legislation can be used to encourage dynamic pricing. Also, 

real-time pricing rates are feasible for residential customers, and they can achieve significant 

savings in the residential market.

 

Massachusetts 

In July 2008, Massachusetts Governor Deval Patrick signed the Green Communities Act, a 

comprehensive energy reform bill.127 Among its many features, this law makes energy 

efficiency programs compete in the market with traditional energy supply. Utility companies 

are now required to purchase all available energy efficiency improvements that cost less than 

it does to generate power. Additionally, utility companies are now required to offer rebates 

and other incentives for customers to upgrade lighting, air conditioning, and industrial 

equipment to more efficient models whenever those incentives cost less than generating the 

electricity it would take to power older, less-efficient equipment.128

 

123 Comverge, Inc., ComEd Residential Real-Time Program – 2007 Annual Report, Illinois Commerce 

Commission Docket No. 06-0617 (filed on April 30, 2008), available at

http://www.icc.illinois.gov/docket/files.aspx?no=06-0617&docId=123573. 

124 Ameren Illinois Utilities, RSP Rider — Power Smart Pricing — 2007 Annual Report, Illinois Commerce 

Commission Docket No. 06-0691 (filed April 15, 2008), available at

http://www.icc.illinois.gov/docket/files.aspx?no=06-0691&docId=123030. 

125 Comverge, Inc., ComEd Residential Real-Time Pricing Program – 2008 Revised Annual Report, Docket 

No. 06-0617 (filed on April 28, 2009), available at

http://www.icc.illinois.gov/docket/files.aspx?no=06-0617&docid=136091. 

126 Ameren Illinois Utilities, Rider PSP — Power Smart Pricing — 2008 Annual Report, Illinois Commerce 

Commission Docket No. 06-0621 (filed on April 30, 2009), available at

http://www.icc.illinois.gov/docket/files.aspx?no=06-0691&docId=136151. 

127 2008 Mass. Acts 50 (amending Mass. Gen. Laws ch. 164B, § 116(a) (2009)).

128 Governor Deval Patrick, Governor Patrick Signs Energy Bill Promoting Cost Savings, Renewable and 

Clean Energy Technology (2008), available at

http://www.mass.gov/?pageID=gov3pressrelease&L=1&L0=Home&sid=Agov3&b=pressrelease&f=08

0702_bill_energy_clean&csid=Agov3. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-8 Appendix B: Examples of Demand Response Programs

Michigan

In January 2007, the Michigan Public Service Commission (PSC) submitted its 21st Century 

Electric Energy Plan129

In Consumers Energy’s Balanced Energy Initiative, the company forecasted that load 

management, demand response, and interruptible load programs would reduce retail peak by 

9.3 percent by 2030.

in response to an executive order from the governor the year before. 

One of the recommendations in the energy plan is that Michigan’s PSC be authorized to 

require the use of active load management measures by utilities (forecasted to reduce demand 

by 570 MW in 10 years). The plan also recommends pilot programs employing advanced 

metering infrastructure to provide real-time price information to customers.

130 The reduction would be implemented through a comprehensive AMI 

program that includes central air conditioning load management and demand response 

programs for residential and small commercial customers. This program would reduce peak 

demand as well as ongoing energy requirements.131

Consumers Energy plans to conduct a demand response and information pilot aimed at 

assessing customer behavior in the smart grid environment. The centerpiece of this pilot is a 

randomized program that places AMI-enabled customers into various dynamic pricing and 

information treatments while comparing them with strategic control groups. 

 

The research is distinguishable from previous demand response pilot programs because it will

1) carefully use treatment randomization to achieve internal and external validity and 2) 

address a set of questions that extends beyond a standard investigation of load-shifting 

behavior.132

• Understand how dynamic pricing can best be incorporated into Consumers Energy’s 

portfolio. 

 At a high level, this research aims to: 

• Understand consumer responses to dynamic electricity pricing, during both peak 

and off-peak periods (to examine demand shifting vs. demand reduction). 

• Evaluate whether automated demand response technology enhances consumer 

responses to dynamic pricing. 

 

129 Lark JP, Michigan’s 21st Century Electric Energy Plan (2007), available at

http://www.michigan.gov/documents/mpsc/21stcenturyenergyplan_185274_7.pdf. 

130 Consumers Energy Company, Electric Generation Alternatives Analysis for Proposed Permit to Install 

No. 341-07 for an Advanced Supercritical Pulverized Coal Boiler at the Karn-Weadock Generating 

Station, MPSC Case No. U-15996 (filed with the Mich. Pub. Serv. Commn. June 5, 2009).

131 In 2018, air conditioning load management is projected to be able to reduce peak demand by 308 

MW. Customer demand response programs associated with AMI are projected to provide further peak 

load reduction of 212 MW by 2018. 

132 E-mail from Mark Lesiw, AMI Senior Program Manager of Load Management, Consumers Energy, to 

Ahmad Faruqui (Sep. 2, 2009, 1:19 PM ET) (on file with The Brattle Group).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix B: Examples of Demand Response Programs B-9

• Compare consumer response to CPP against critical peak rebates. 

• Understand consumer responses to real-time provision of information regarding 

electricity usage, during both peak and off-peak periods. 

• Evaluate potential climate change mitigation impacts of demand response programs 

and information provision. 

• Evaluate the extent to which participation in demand response and/or information 

programs motivates lasting energy efficiency improvements. 

• Evaluate the heterogeneity of responses to these programs across subpopulations. 

While the CPP and real-time pricing programs may appeal to many of Consumers Energy’s 

customers, a portion of their customer base may prefer a different, potentially less involved 

program that can provide them with opportunities to reduce their bills while requiring 

minimal action on their part. To provide these customers with a program of that nature, 

Consumers Energy will concurrently roll out Load Management and advanced Direct Load 

Control programs that will leverage AMI investment.133

In addition to future efforts, demand reduction has been conducted in Michigan for many 

years. Detroit Edison maintains a significant Direct Load Control Interruptible Air 

Conditioning (IAC)134 program, which was established more than 20 years ago during the 

days of demand-side management. IAC has grown to more than 280,000 enrolled customers

(of 1.9 million total customers, with a 79.1 percent central air conditioning saturation)135

The current diversified per customer load reduction is 0.85 kW, which is down considerably 

from approximately 1.2 kW 10 years ago. This decrease in load reduction is due to the 

increase in efficiency of central air conditioning units over the years.

 who 

receive a $0.02 rate break during the cooling months of June–October in exchange for the 

possibility of interruption by the company via remote control relays. This pricing structure is 

unique because it provides a discount on the hourly rate instead of a fixed amount monthly 

credit. 

136

The IAC program is intended to help curtail peak load during emergency or high price 

periods. It is also utilized as capacity reserve, as it is available within 10 minutes. The 

program is a cycling program at 15-minute on/off intervals that is capable of shedding up to 

 

133 Id. 

134 DTE Energy, Interruptible Air Conditioning Rate (2009), 

http://www.dteenergy.com/residentialCustomers/billingPayment/rates/electric/

interruptibleRates.html. 

135 E-mail from Mark Williamson, Manager, Load Research, DTE Energy, to Ahmad Faruqui (Aug. 31, 

2009, 1:21 PM ET) (on file with The Brattle Group).

136 Id.
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-10 Appendix B: Examples of Demand Response Programs

230 MW of load on days over 90 degrees Fahrenheit. IAC may be cycled for no more than 8 

hours within a 24-hour period.137

In addition, the program is used for localized substation load relief. Detroit Edison developed 

a remote control program using IAC customers (identified by the substation serving them) 

that is capable of interrupting only customers taking service within substation-serviced 

areas.138 This program has proven very successful at relieving load on overloaded substations 

and avoiding localized circuit rotation, brownouts, and, in extreme cases, the loss of a 

substation transformer.139

This case study is an example of legislation being passed to encourage new types of demand 

response programs to complement existing, successful programs.

 

Washington, D.C. 

It is very expensive and time-consuming to change billing systems and processes for sending 

bills to customers. Instead of overhauling the entire billing system and the process of mailing 

bills, it is possible to include a simple dynamic pricing line item adjustment in the current 

billing system and provide a detailed explanation of this dynamic pricing adjustment in a bill 

insert. An example of such a demand response bill insert, provided from Washington‘s 

PowerCentsDC pilot program,140 is provided in Figure 6. This example is not the actual bill 

that pilot program participants receive. Rather, this is supplemental information included as 

an insert with the actual bill.141

This case study provides an example of a billing structure that considers the many regulatory 

and information technology factors surrounding the billing of customers.

 

137 E-mail from Mark Williamson, Manager, Load Research, DTE Energy, to Ahmad Faruqui (Aug. 31, 

2009, 9:48 AM ET) (on file with The Brattle Group).

138 See MacDonald T, The Localized Substation Load Relief Program at Detroit Edison, Presentation for 

AEIC National Conference (2006), PowerPoint available at

http://www.aeic.org/load_research/docs/15_2006_09_The_Localized_Substation_Load_Relief_Progra

m_at_Detroit_Edison_presentation_.ppt. 

139 See id.

140 For more information about this pilot program, please visit http://www.powercentsdc.org/. 

141 E-mails from Chris King, eMeter, to Ahmad Faruqui (Aug. 30, 2009, 2:08 AM ET; Sept. 1, 2009, 

10:15 AM ET) (on file with The Brattle Group).
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix B: Examples of Demand Response Programs B-11

Figure 6: PowerCentsDC Pilot Program Sample Bill 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-12 Appendix B: Examples of Demand Response Programs

Wholesale Programs

RTO and ISO program offerings are summarized in Table 3.

142

Table 3: Wholesale Programs 

Name Service 

Type Trigger Response Time

California ISO

Participating Load 

Program Energy Market bid (energy price > offer price) 1 hour

Participating Load 

Program Reserve

Market bid (capacity 

bid and separate 

energy bid > offer 

price)

10 minutes

Electric Reliability Council of Texas 

Emergency Interruptible 

Load Service Capacity Reliability 10 minutes

Loads Acting as a 

Resource Providing 

Responsive Reserve 

Service — Under 

Frequency Relay Type

Reserve Reliability (automatic 

relay)

0.5 seconds (automatic 

relay) or 10 minutes 

(phone)

Loads Acting as a 

Resource Providing 

Responsive Reserve 

Service — Controllable 

Load Resource Type

Reserve Reliability

Continuous, similar to 

governor action by a 

generator; and 10-

minute response for 

remaining obligation to 

electronic instruction

Loads Acting as a 

Resource Providing NonSpinning Reserve 

Service

Reserve Reliability 30 minutes

Controllable Load 

Resources Providing 

Regulation Service

Regulation Reliability Effectively 

instantaneous

ISO-New England

Real Time Demand 

Response Program 

(Capacity Component)

Capacity Reliability 10 minutes/30 minutes

Real Time Demand 

Response Program 

(Energy Component)

Energy Reliability 10 minutes/30 minutes

Day-Ahead Load 

Response Program for 

RTDRP

Energy

Market bid (dayahead LMP = or > 

offer price)

Effectively 

instantaneous

 

142 The information is adapted from the ISO/RTO Council’s North American Wholesale Electricity Demand 

Response Program Comparison, available at http://www.isorto.org/atf/cf/%7B5B4E85C6-7EAC-40A0-

8DC3-

003829518EBD%7D/IRC%20DR%20M&V%20Standards%20Implementation%20Comparison%20(20

09-04-28).xls. 
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix B: Examples of Demand Response Programs B-13

Name Service 

Type Trigger Response Time

ISO-New England (continued)

Day-Ahead Load 

Response Program for 

RTPR

Energy

Market bid (dayahead LMP = or > 

offer price)

Effectively 

instantaneous

Demand Response 

Reserves Pilot Reserve Reliability 30 minutes

Real Time Price 

Response Program Energy

Market bid (dayahead or forecast 

real-time LMP = or > 

$100/MWh)

Effectively 

instantaneous

Real Time Demand 

Response Resource Capacity Reliability 30 minutes

FCM: On-Peak, Seasonal 

Peak Resources Capacity Reliability Effectively 

instantaneous

Real Time Emergency 

Generation Resource Capacity Reliability Effectively 

instantaneous

Midwest ISO

Emergency Demand 

Response Energy Reliability Resource-specific (biddable parameter)

Demand Response 

Resource Type I Energy Market bid (energy 

price > offer price) 5 minutes

Demand Response 

Resource Type I Reserve Market bid (energy 

price > offer price) 10 minutes

Demand Response 

Resource Type II Energy Market bid (energy 

price > offer price) 5 minutes

Demand Response 

Resource Type II Reserve Market bid (energy price > offer price) 10 minutes

Demand Response 

Resource Type II Regulation Market bid (energy 

price > offer price)

Effectively 

instantaneous

Load Modifying 

Resource Capacity Reliability — 

New York ISO

Day-Ahead Demand 

Response Program Energy

Market bid (energy 

price > offer price) 

(security-constrained 

unit commitment)

— 

Demand Side Ancillary 

Services Program Reserve

Market bid (energy 

price > offer price) 

(security-constrained 

economic dispatch) 

(10 minute ramp)

10 minutes

Demand Side Ancillary 

Services Program Reserve

Market bid (energy 

price > offer price) 

(security-constrained 

economic dispatch) 

(10 minute/30 minute 

ramp)

10 minutes/30 minutes
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

B-14 Appendix B: Examples of Demand Response Programs

Name Service 

Type Trigger Response Time

New York ISO (continued)

Demand Side Ancillary 

Services Program Regulation

Market bid (energy 

price > offer price) 

(security-constrained 

economic dispatch)

Effectively 

instantaneous

Emergency Demand 

Response Program Energy Reliability 2 hours

Installed Capacity 

Special Case Resources 

(Energy Component)

Energy Reliability 2 hours

Installed Capacity 

Special Case Resources 

(Capacity Component)

Capacity Reliability 2 hours

PJM

Economic Load 

Response Energy

Market bid (selfscheduled, cleared 

day-ahead bid, or 

real-time dispatch)

Resource-specific

Economic Load 

Response Reserve Reliability (one hour 

notice) 10 minutes

Economic Load 

Response Reserve Reliability (day-ahead notice) 30 minutes

Economic Load 

Response Regulation Reliability Effectively 

instantaneous

Emergency Load 

Response — Energy Only Energy Reliability 1 hour or 2 hours

(participant-selected)

Full Emergency Load 

Response (Capacity 

Component)

Capacity Reliability 1 hour or 2 hours

(participant-selected)

Full Emergency Load 

Response (Energy 

Component)

Energy Reliability 1 hour or 2 hours

(participant-selected)

Southwest Power Pool

Variable Dispatch 

Demand Response Energy

Market bid (energy 

price > offer price) 

(security-constrained 

economic dispatch)

5 minutes 

FCM: forward capacity market

LMP: locational marginal price

MWh: megawatt-hour

RTDRP: real-time demand response program

RTPR: real-time price response
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix C: List of Commenters C-1 

APPENDIX C : 

List of Commenters 

he following commenters presented comments at the Technical Conference held at the 

Commission’s headquarters on November 19–20, 2009:

• Wal-Mart Stores, Inc., Ken Baker

• Illinois Commerce Commission, Sherman Elliott

• Florida Power & Light, John Haney

• Demand Response Coordinating Committee, Dan Delurey

• Sacramento Municipal Utility District, Jim Parks

• Hess Corporation, Jay Kooper

• National Rural Electric Cooperative Association, David Mohre

• Ohio Consumers’ Counsel, Janine Migden-Ostrander 

• Alcoa, Inc., Walter Brockway

• ISO-New England, Inc., Henry Yoshimura

• Energy Curtailment Specialists, Paul Tyno

• To the Point, Judith Schwartz

• General Electric, Mary Bell

• IBM Energy and Utilities, Don Mak

The following submitted written comments to the Commission in response to the Discussion 

Draft: 

• American Public Power Association

• Brett Feldman

• California Department of Water Resources State Water Project

• California Public Utilities Commission

• Californians for Renewable Energy, Inc.

T
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6

9 3

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9 3

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9 3

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6

9 3

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9 3

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9 3

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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

C-2 Appendix C: List of Commenters

• Constellation Energy Commodities Group, Inc. and Constellation NewEnergy, Inc.

• Demand Response and Smart Grid Coalition

• Demand Response Coordinating Committee

• District of Columbia Public Service Commission

• Edison Electric Institute

• Electricity Consumers Resource Council 

• Energy Curtailment Specialists, Inc.

• Environmental Defense Fund

• Federal Trade Commission

• Hess Corporation 

• heyCoop, LLC

• Ice Energy, Inc. 

• National Association of Regulatory Utility Commissioners

• National Association of State Utility Consumer Advocates

• National Grid USA

• National Rural Electric Cooperative Association

• New York State Public Service Commission

• North America Power Partners LLC

• North American Electric Reliability Corporation

• Occidental Chemical Corp. et al.

• Ohio Public Utilities Commission

• Pacific Gas & Electric Co.

• Peak Load Management Alliance (Aztech Associates, Inc., Comverge, Inc., CPower, 

Inc., Energy Curtailment Specialists, Schneider Electric, Southern California Edison, 

and Summit Blue Consulting)

• Portland General Electric Co.
12

6

9 3

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9 3

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9 3

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9 3

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9 3

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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

Appendix C: List of Commenters C-3 

• Project for Sustainable FERC Energy Policy

• PSEG Companies

• Robert Borlick

• San Diego Gas & Electric Co.

• Smart Grid Library (Christine Hertzog)

• Southern California Edison Co.

• Steel Producers

• Tendril Networks, Inc.

• To the Point

• Utilimetrics 

• Utility Economic Engineers (Mark B. Lively)

• Wal-Mart Stores, Inc.

• Ziphany, LLC

The following submitted written comments to the Commission in response to the Draft 

National Action Plan:

• American Electric Power Service Corp.

• American Public Power Association

• Association of Home Appliance Manufacturers

• California Public Utilities Commission

• Demand Response Coordinating Committee

• Demand Response and Smart Grid Coalition

• Edison Electric Institute

• Electric Power Supply Association

• Energy Curtailment Specialists

• EnerNOC, Inc.

• GE Energy
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NATIONAL ACTION PLAN ON DEMAND RESPONSE 9 3

C-4 Appendix C: List of Commenters

• Gridwise Architectural Council

• Ice Energy, Inc.

• Illinois Commerce Commission

• Indicated New York Transmission owners

• ISO New England

• Judith Schwartz

• Maine Public Utilities Commission

• Maryland Public Service Commission

• Massachusetts Department of Public Utilities

• Midwest Independent System Operator, Inc.

• North American Energy Standards Board

• National Association of Regulatory Utility Commissioners

• National Association of State Utility Consumer Advocates

• National Energy Marketers Association

• National Grid

• National Rural Electric Cooperative Association

• New York Independent System Operator

• Public Interest Organizations/Project for Sustainable FERC Energy Policy 

• San Diego Gas & Electric Co.

• Southern California Edison Co.

• Southern Company

• Tendril Networks, Inc.

• Wal-Mart Stores, Inc.

• Xcel Energy Services, Inc.

Federal Energy Regulatory Commission

888 First Street, NE

Washington, DC 20426

National Action Plan on Demand Response

Docket No. AD09-10

June 17, 2010