Draft for Comment of the 

National Action Plan on 

Demand Response 

The Federal Energy Regulatory Commission Staff 

DOCKET NO. AD09-10 

Prepared with the support of 

The Brattle Group GMMB 

Customer Performance Group David Lineweber, Ph.D. 

March 11, 2010

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.

i

Table of Contents

EXECUTIVE SUMMARY........................................................................................................................................ 1

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

STRATEGIC VISION ........................................................................................................................................ 2

STRATEGIES AND ACTIVITIES ........................................................................................................................... 2

INTRODUCTION.................................................................................................................................................. 5

LEGISLATIVE MANDATE.................................................................................................................................. 6

BACKGROUND ON DEMAND RESPONSE ............................................................................................................ 7

Defining Demand Response................................................................................................................. 7

The Geography of Demand Response ................................................................................................. 8

SIDEBAR 1: DEMAND RESPONSE IN ORGANIZED MARKETS ................................................................................ 10

THE OBJECTIVE OF THE NATIONAL ACTION PLAN.............................................................................................. 11

PROCESS FOR DEVELOPING THE NATIONAL ACTION PLAN.................................................................................. 12

OVERVIEW OF STAKEHOLDER FEEDBACK ......................................................................................................... 13

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 Be Established?........................................................................................ 19

1.2 EXAMPLES OF THE COALITION APPROACH ................................................................................................. 21

The National Action Plan for Energy Efficiency ................................................................................. 21

The Air Bag and Seat Belt Safety Campaign....................................................................................... 21

SIDEBAR 2:  COORDINATION OF ENERGY EFFICIENCY AND DEMAND RESPONSE ..................................................... 23

PART 2: STRATEGIES AND ACTIVITIES................................................................................................................ 25

2.1 TECHNICAL ASSISTANCE TO STATES .......................................................................................................... 26

Introduction....................................................................................................................................... 26

Technical Assistance Actions ............................................................................................................. 28

Establish a National Forum................................................................................................................ 28

Conduct Informational and Educational Sessions for Policymakers and Regulators ........................ 29

Conduct Communications Training for State and Local Governing Officials..................................... 31

Build a Panel of Demand Response Experts ...................................................................................... 32

Sponsor Technical Papers .................................................................................................................. 33

Establish a Program for Technical Assistance for Demand Response ............................................... 34

Establish a Demand Response Grant Program .................................................................................. 35

2.2 NATIONAL COMMUNICATIONS PROGRAM................................................................................................. 36

Introduction....................................................................................................................................... 36

Objectives of the National Communications Program ...................................................................... 41

National Communications Program Structure .................................................................................. 42

2.3 TOOLS AND MATERIALS FOR USE BY CUSTOMERS, STATES AND DEMAND RESPONSE PROVIDERS ....................... 59

Develop a Web‐based Clearinghouse of Demand Response Materials ............................................ 60

Develop or Enhance Demand Response Estimation Tools and Methods.......................................... 68

SIDEBAR 3:  THE DRIVE MODEL ................................................................................................................... 78
National Action Plan on Demand Response – DRAFT –  

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APPENDIX 1: COALITION EXAMPLES.................................................................................................................. 81

THE NATIONAL ACTION PLAN FOR ENERGY EFFICIENCY ..................................................................................... 81

THE AIR BAG AND SEAT BELT SAFETY CAMPAIGN............................................................................................. 82

APPENDIX 2: RESEARCH GAPS...........................................................................................................................85

SOCIAL SCIENCE RESEARCH ISSUES................................................................................................................. 85

TECHNICAL RESEARCH ISSUES ....................................................................................................................... 86

APPENDIX 3: EXAMPLES OF EXISTING DEMAND RESPONSE PROGRAMS ............................................................ 89

RETAIL PROGRAMS ..................................................................................................................................... 90

Arizona............................................................................................................................................... 90

California............................................................................................................................................ 90

Connecticut........................................................................................................................................ 91

Delaware............................................................................................................................................ 92

Florida ................................................................................................................................................ 92

Georgia............................................................................................................................................... 94

Illinois................................................................................................................................................. 94

Massachusetts ................................................................................................................................... 95

Michigan ............................................................................................................................................ 96

Washington, D.C. ............................................................................................................................... 98

WHOLESALE PROGRAMS............................................................................................................................ 100

APPENDIX 4:  LIST OF COMMENTERS............................................................................................................... 103
1

Executive Summary 

Introduction 

The 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  This National Action Plan is designed to meet three objectives:  

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.   

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

states, localities, and regions.  Although its recommended 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 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 non‐governmental

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  This draft of the National Action Plan

                                                      

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). 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.
National Action Plan on Demand Response – DRAFT –  

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was prepared after reviewing the many ideas that reflect the diverse views of a broad range of

entities.  The draft is now being offered for a final round of comments.

Strategic Vision 

This National Action Plan recommends the formation of a Coalition to provide assistance to the

federal government in implementing 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 on their own.  This

National Action Plan recommends that an agency of the federal government would lead and

fund implementation of the National Action Plan with assistance from a panel of Coalition

members.  The federal agency would coordinate the creation and operation of the panel and

federal agency staff would manage the implementation of the National Action Plan.  The

federal agency would be tasked with making strategic and day‐to‐day decisions such as setting

priorities and managing the budget.  The Coalition would provide assistance to the federal

agency.  The panel of coalition members would consist of volunteer leaders from individual

companies, organizations, and state and local governments providing advice, strategic insights

and expertise to the federal agency.  The Coalition would be funded through non‐federal

sources,4 but some Coalition meetings and activities could be eligible for federal funding,

depending upon the availability of federal funds and relevant legal restrictions.  

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 identification or

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

providers.

1) Technical Assistance to States

Subject to funding, the National Action Plan is to provide technical assistance to states as

follows:

First, the Coalition would organize a panel of demand response experts to help inform various

constituencies about demand response programs, products, technologies, and incentives and

their 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)

and with knowledge of local and regional issues.  

Second, subject to funding and identified need, the federal agency would fund several

activities:  primary and secondary research targeted to various practical aspects of demand

response implementation (e.g., sponsorship of technical papers or pilots), establishment of a

                                                       4 Non‐federal funding means that participating organizations would directly fund Coalition activities or arrange for

additional funding from other sources.
National Action Plan on Demand Response – DRAFT –  

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program to provide technical assistance for demand response, and the establishment of a

demand response grant program.  

Third, state, local officials and interested stakeholders would partner with the federal agency

(with input from the Coalition).  National and regional forums and sessions would provide

information on the National Action Plan and research conducted under the National Action Plan

while providing the federal agency and the Coalition with feedback on key issues and lessons

learned.

These steps are meant to be complementary, but the federal agency and Coalition could

implement them as needed, picking and choosing the actions that have the greatest value.

  

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 broad‐

based customer education and support.  The national communications program would have a

multi‐faceted 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  It would also 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.

A local implementation strategy would be designed based upon 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 would use the research‐based message framework and communications tools

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

conduct outreach toward their particular customers.  

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

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

                                                      

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.
National Action Plan on Demand Response – DRAFT –  

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develop demand response in every region but particularly in areas where there are no existing

demand response programs or current plans to implement such programs.

These strategies, national and local, should 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 would be established to provide stakeholders with the most current

information and analyses on demand response.  The web‐based clearinghouse would include

existing research as well as new research sponsored by the federal agency 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 federal agency would oversee

management of the clearinghouse and dissemination of information and analyses rather than

conduct and report its own analyses.  The clearinghouse would also 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 federal agency’s

role, with input from the Coalition, would be to oversee 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 information‐sharing on current successful examples.  Based on the outcomes of either

of these options, research decisions would be made by the federal agency with support from

the Coalition to modify existing tools and methods or develop new ones.
National Action Plan on Demand Response – DRAFT –  

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Introduction 

Demand 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

  Because

current efforts have missed a significant portion of the cost‐effective demand response

potential, it is evident that action needs to be taken to either create new programs or expand

existing ones.   

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

Response (National Action Plan), which will recommend actions that could be taken to achieve

the demand response potential in the United States.  Congress required FERC staff to develop

such a plan in the Energy Independence and Security Act (EISA) of 2007.7

  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 recommended 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.   

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 non‐governmental

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 Plan8 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  This draft of the National Action Plan

                                                      

6

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

http://www.ferc.gov/legal/staff‐reports/06‐09‐demand‐response.pdf (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. 2008), available at

http://www.ferc.gov/EventCalendar/Files/20091028124306‐AD09‐10‐000‐Discussion.pdf (Discussion Draft). 9

      Docket No. AD09‐10.
National Action Plan on Demand Response – DRAFT –  

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was prepared after reviewing the many ideas that reflect the diverse views of a broad range of

entities.  This draft is now being offered for a final round of comments.

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

development, and context for understanding the National Action Plan.

Legislative Mandate 

Congress required FERC to develop the National Action Plan as the second stage of a three‐

stage process that is outlined in section 529 of EISA, entitled “Electricity Sector Demand

Response.”10  

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.11  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.

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

Plan.  This document is designed to meet three objectives:  

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.”12

                                                      

10   EISA section 529. 11   National Assessment, supra note 5. 12     EISA section 529(c).
National Action Plan on Demand Response – DRAFT –  

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Background on Demand Response 

Defining Demand Response 

Before discussing the recommended actions of 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.”13   

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 in customer dwellings that can respond in near

real‐time to the signals of a utility, load‐serving entity or other demand response provider, or to

changes in bulk power system conditions such as a change in system frequency.  It also includes

                                                       13   See Wholesale Competition in Regions With Organized Electric Markets, Order No. 719, 73 Fed. Reg. 64,100

(Oct. 28, 2008), FERC Stats. & Regs. ¶ 31,281 (2008), order on reh’g, Order No. 719‐A, 128 FERC ¶ 61,059

(2009) (codified at 18 C.F.R. § 35.28(b)(4) (2009).
National Action Plan on Demand Response – DRAFT –  

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the smart integration of changeable consumption with variable generation to enable the

addition of new technologies (such as wind farms and rooftop solar systems) to utility systems.  

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 enabled through the use of time‐of‐use

rates14 that encourage nighttime charging of home energy storage systems, PHEVs, and all‐

electric vehicles.

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

4 percent of current U.S. peak demand.15  The existing programs are mostly reliability‐driven

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.16  These

programs have been in place for decades.

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 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.17

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 2019.18  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 9 percent of U.S. peak demand.19

                                                      

14   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. 15   National Assessment, supra note 5, at 27. 16   FERC Staff, Assessment of Demand Response and Advanced Metering (2008), available at

http://www.ferc.gov/legal/staff‐reports/12‐08‐demand‐response.pdf.   17   National Assessment, supra note 5, at 42–44. 18   Id. at 27.   19   Id.
National Action Plan on Demand Response – DRAFT –  

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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.20  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.

Dynamic pricing has relatively little market penetration today.  In 35 of the 50 states (plus the

District of Columbia), the National Assessment found that dynamic pricing currently has no

impact.21  Either dynamic pricing rates are not being offered in those states or customer

participation rates are too low to produce significant impacts.  In 15 states, dynamic pricing is

estimated to have an impact of 1 to 2 percent; in one state, it has an impact of 3 percent.22  

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‐out basis or a universal basis.23

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.

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

http://www.oe.energy.gov/recovery/1249.htm. 21   The National Assessment provides a state‐level analysis of demand response, including a snapshot of existing

programs.  See Appendix A of the National Assessment for this information. 22   National Assessment, supra note 5. 23   Id. at 27.
National Action Plan on Demand Response – DRAFT –

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During the past decade, demand response resources have 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 2 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.

Sidebar 1: Demand Response in Organized Markets 
National Action Plan on Demand Response – DRAFT –  

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The Objective of the National Action Plan 

The National Action Plan aspires to maximize the amount of cost‐effective demand response

resources that can be developed and deployed in the United States.  To achieve this objective,

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

price‐responsive demand response and 2) facilitating market penetration of newly developing

“smart grid” technologies and programs.

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 realization in the Assessment that the greatest potential for peak load

reductions is in 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.  

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 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

during 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

resources.   

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

proposes to build on the successes of demand response initiatives by developing more

dispatchable demand response (dispatchable to price and non‐price directions), fostering the

full 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 and 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 will allow power markets to work better, lower costs,

and 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
National Action Plan on Demand Response – DRAFT –  

12   

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.”24  Also, the Commission is directed to “seek

consensus where possible, and decide on optimum solutions to issues that defy consensus.”25  

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

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 and contractors

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.

                                                      

24   EISA section 529. 25 Id.
National Action Plan on Demand Response – DRAFT –  

13

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 non‐governmental 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.26

5.  Gather written comments

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 some differing opinions.27  The comments are summarized under “Overview of

Stakeholder Feedback” below.  Appendix 4 lists the organizations who commented during the

technical conference or through written comments.

All of these activities contributed to the development of the National Action Plan.  To further

elicit stakeholder feedback, FERC seeks comment on this draft of the National Action Plan.  

These comments will be considered in developing the final National Action Plan to be published

in June 2010.

Overview of Stakeholder Feedback 

With few exceptions, comments were generally supportive as to the appropriateness and

effectiveness of the strategies and activities described in the Discussion Draft.  There also

appeared to be broad support for the development of a Coalition to implement the national

action plan.  Many comments suggested that this Coalition leverage the experience of existing

organizations and coalitions.  They also recommended that the initiatives it implements allow

individual states and local regions enough flexibility to tailor demand response programs and

messages to suit the needs of their customers.  

Commenters also supported the proposal to establish a national forum to develop a national

message regarding the benefits of demand response.  Most concerns about establishing a

national forum focused on funding.  To encourage broad participation, commenters suggested

that the Coalition offer federal grants to offset travel expenses and also consider hosting the

national forum in tandem with an existing event such as a meeting of the National Association

of Regulatory Utility Commissioners.  There was also broad support for the development of

                                                       26 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. 27     These comments are available in Docket No. AD09‐10, which is the docket for the National Action Plan on

Demand Response.
National Action Plan on Demand Response – DRAFT –  

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regional workshops to encourage the participation of local policymakers and stakeholders and

to tailor demand response education to their needs.   

There appeared to be broad support for the development of technical assistance to states.  

Commenters generally supported the development of informational and educational sessions

for policymakers and demand response providers.  Commenters also supported the creation of

a panel of demand response experts to be available as a resource for state and local governing

officials during policy development or regulatory proceedings and a clearinghouse of technical

research to increased awareness of existing demand response experiences and their reported

benefits and lessons learned to facilitate development of demand response programs.  Subject

to available funding, comments reflected broad support for the establishment of a demand

response grant program.  

Comments reflected support for the proposal to develop a national communication campaign

to communicate opportunities and benefits of demand response to consumers.  However,

many comments suggested that the Coalition should not develop a single national message.  

Instead, commenters recommended that the Coalition create a broad, flexible message that

could complement existing efforts by states and regional and local entities to educate

consumers.  

As a first step in developing a communications campaign, comments supported the

performance of foundational market research to assess the needs of specific states and regions.  

A few comments supported the development of a message targeted for commercial and

industrial customers.  Commenters were split as to the appropriateness of developing a new

demand response brand.  Their principal concern seemed to be developing a message that

would resonate with consumers in individual localities, states and regions.  Comments generally

supported coordinating efforts with existing energy conservation and efficiency programs.  

They also supported dissemination of communications assistance and toolkits to policymakers

and stakeholders.

Comments reflected broad support for the development of demand response estimation tools

and methods.  Commenters appeared most interested in the development of measurement

and verification tools to allow utilities to apply consistent formulas for calculating baselines,

peak‐load reductions, and demand response savings.  There was some support for developing

standards and protocols for demand response, but commenters urged that these standards and

protocols be flexible enough for states to incorporate into existing programs.  Commenters

suggested that the North American Energy Standards Board and the National Institute of

Standards and Technology, among others, would be qualified to develop these tools and the

associated standards and protocols.  Commenters also supported development of guidelines on

rate design for dynamic pricing as long as such programs do not interfere with existing

competitive alternatives such as interruptible load.
National Action Plan on Demand Response – DRAFT –  

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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 that has been recommended as the framework for

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

establishing and funding the Coalition.  Finally, Part 1 presents case studies of how the Coalition

approach has succeeded in other applications.

Part 2 outlines the recommended actions of the National Action Plan.  These policy actions are

organized into three categories:  technical assistance to states, the national communications

program, and develop or identify tools and materials for use by customers, states and demand

response providers.   
National Action Plan on Demand Response – DRAFT –  

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17

Part 1: Strategic Vision of the National Action 

Plan 

1.1 The Coalition 

This National Action Plan recommends the formation of a Coalition to assist the federal

government in implementing 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 on their own.    

FERC received many comments in favor of the involvement of a Coalition in implementing the

National Action Plan.  Additional recommendations included ensuring that consumers and

other organizations involved in either electricity generation or use are represented in the

Coalition, that the Coalition’s role be clear, and that existing coalitions be included and utilized

and work not duplicated.  Comments opposed to the Coalition stemmed from concern that

consumers may not be adequately represented or that the Coalition could usurp local entities’

work in communicating with customers.  These comments have been addressed below.   

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.  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,

RTOs, ISOs, and customers (both industrial and end‐use customers) will help ensure that the

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 and build support for a

comprehensive national strategy and ensure its success.
National Action Plan on Demand Response – DRAFT –  

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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

 Interest groups and other stakeholders

Table 1 describes the Coalition’s participants in more detail.  Figures 1 and 2 show the role of

these participants and their potential interactions under two proposed scenarios.  

Table 1: Summary of the Coalition Strategy Elements

Element Description

Coalition   A group of organizations representing different interests around

demand response, including, but not limited to, government

(federal, state, and local), industry (utilities, load‐serving entities,

other demand response providers, wholesalers, vendors),

consumer groups/consumer advocates, and nonprofit foundations.

State and local

governing officials

Includes governors, state energy offices, public utility commissions,

local governments, and cooperative boards.  

Utilities/load‐serving

entities/other demand

response providers

Includes vertically integrated utilities, transmission or distribution

owners, RTOs/ISOs, cooperatives, municipal utilities, and other

demand response providers.

Other stakeholders Product and service providers (hardware, software, program

administration/implementation, measurement and verification,

networking and communications), consumer advocates, consumer

groups, residential customers and small medium and large

commercial and industrial customers, foundations (nonprofits, non‐

government organizations), the renewable industry, the electric

vehicle interests, consumer products interests, and others.

What Elements Make a Coalition Successful? 

There are many factors that help a Coalition succeed:

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

on the goals they are trying to meet.  
National Action Plan on Demand Response – DRAFT –  

19

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

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

the goals of the organization will be measured.   

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

depending on the nature of the work, strong staff or consultants who provide assistance

and direction to help the volunteers achieve their goals.

a. Effective volunteers:  First and foremost, stakeholder members should be

cooperative and support the Coalition’s goals.  These members should be leaders

who are empowered to make decisions for their respective organizations.  They

must also have time to commit to the duties of the Coalition.28  

b. Effective volunteer leaders:  A smaller subset of stakeholders who are dedicated

to the work of the Coalition and well‐versed in working with other volunteers

can provide leadership and vision to the overall organization.  

c. Strong staff:  Given that stakeholders will be volunteering their time in support

of the Coalition’s goals, it will be important to have staff or consultants who

could help facilitate the work to accomplish the organization’s goals.  It is also

important that staff (and consultants, as needed) be able to manage a diverse

range of opinions and help facilitate the work of the volunteer leaders.  

4. Clear funding structure.  To achieve its goals in a timely fashion, the Coalition must have

a budget commensurate with its goals and the ability to spend it as needed.

How Should the Coalition Be Established? 

In the development of the implementation proposal to be submitted to Congress the Coalition

could be established under a number of different scenarios.  FERC staff proposes that the

federal government should lead and fund implementation of the National Action Plan with

assistance from a panel of Coalition members.  This panel would consist of volunteer leaders

from individual companies, organizations, and state and local governments who could provide

advice, strategic insights and expertise.  As discussed here, the Coalition will be funded by non‐

federal sources.  However after the Coalition is a legal entity, it would potentially be eligible to

obtain funding for some Coalition meetings or activities from the federal agency consistent with

funding availability and relevant legal restrictions.  

The federal agency would fund and the agency’s staff would manage the implementation of the

National Action Plan.  It would be tasked with making strategic and day‐to‐day decisions such as

setting priorities and managing the budget.  To ensure accountability, short‐term, mid‐term,

and long‐term goals would be established by the federal agency staff with assistance from the

Coalition on achievable goals.  

The federal agency implementing the National Action Plan would provide a strong level of

engagement and drive, as well as funding.  Stakeholders, as represented by Coalition panel

                                                      

28   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).  
National Action Plan on Demand Response – DRAFT –  

20   

members, would have a voice in the process and would be able to provide the federal agency

the benefit of their expertise.   

Figure 1 shows the structure of the National Action Plan effort.

Figure 1: National Action Plan Structure  

Figure 1 above illustrates how the federal government and participants in the Coalition would

interact to maximize demand response.  A Coalition panel would be formed from stakeholders.  

A federal agency would coordinate creation and operation of the panel.  The Coalition would

help the federal agency determine how best to shape the activities and the implementation of
National Action Plan on Demand Response – DRAFT –  

21

the National Action Plan, which would help stakeholders nationwide implement demand

response locally with customers.  Stakeholders also would communicate with and provide

feedback to the Coalition on how they could best maximize demand response.  

1.2 Examples of the Coalition Approach 

The use of a Coalition has been successful in other policy areas.  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 1 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.

29  This report is a call to action to increase investment in energy efficiency;

it lays out a vision for providing experts and resource materials to parties who are interested in

pursuing energy efficiency.  In 2008, the National Action Plan for Energy Efficiency was updated

with the Vision for 2025,

30 which identifies 10 implementation goals and measures the progress

made so far.  Recently, the Leadership Group has undertaken further activities regarding the

coordination of demand response and energy efficiency that are described in Sidebar 2.

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

of Regulatory Utility Commissioners, 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 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

                                                       29   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. 30   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.
National Action Plan on Demand Response – DRAFT –  

22   

stagnant nationwide seat belt use.31  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 they were well‐prepared to serve as

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

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 2005.32  Child fatalities from traffic crashes

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

to 94 percent.33  

                                                      

31   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. 32 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‐Lifesaving‐Achievements. 33   National Safety Council, Welcome to the Air Bag & Seat Belt Safety Campaign (2004), available at http://www2.nsc.org/airbag.htm.
National Action Plan on Demand Response – DRAFT –  

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Sidebar 2: Coordination of Energy Efficiency and Demand Response 

In support of the ten implementation goals outlined in the National Action Plan for Energy Efficiency’s

Vision for 2025,

1 the National Energy 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.

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.

25

Part 2: Strategies and Activities 

This 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 develop or identify 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 2 illustrates the

functional overlap between the three activity areas.

Figure 2: 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

Communications

Program

Tools and

Materials

Assistance to

States

•Panel of

Demand

Response

Experts

•Demand

Response

Grant

Program

•Demand Response

Estimation Tools and

Methods

•Develop a

Communications

Umbrella

•Partnership

development

•Communication

with, and tech

assistance to

states & federal

agencies

•Local

implementation

•Web‐base

clearinghouse

•Technical

papers
National Action Plan on Demand Response – DRAFT –  

26   

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.

2.1 Technical Assistance to States 

Introduction 

Section 529 of EISA requires that the National Action Plan identify what technical assistance34

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.  

In many states, a variety of entities are already providing demand response resources.  (See

Appendix 3 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.35  

In some states, RTOs and ISOs operate organized energy and capacity markets into which

demand response can be bid as a resource.  Appendix 3 also lists current opportunities for

demand response to participate in RTO/ISO markets.

Several states have taken regulatory or legislative actions to encourage demand response and

energy efficiency.36  For example, the Michigan Public Service Commission’s Michigan’s 21st

                                                      

34 FERC staff defines technical assistance to include, for example, the provision of information, supporting

research, funding, and onsite assistance.    35 Conn. Gen. Stat. § 16a‐3a (2008). 36   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).
National Action Plan on Demand Response – DRAFT –  

27

Century Energy Plan37 and the New Jersey Board of Public Utilities’ Energy Master Plan38 set

forth targets to reduce energy consumption and peak demand for the utilities and/or load‐

serving entities operating in those states.  Massachusetts’ Green Communities Act,39

Maryland’s EmPOWER Maryland Energy Efficiency Act of 2009,40 and Pennsylvania’s Act 12941

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.42  In Iowa, utilities are

required to develop energy efficiency programs,43 which include demand response.44

Many state and local governing officials and other key stakeholders (such as other demand

response providers and public power entities, including rural cooperatives and municipal

utilities) recognize the potential benefits of demand response programs, products,

technologies, and incentives and would like to increase participation and expand their

deployment.45  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.   

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

                                                      

37   JP Lark, Michigan’s 21st Century Electric Energy Plan (2007), available at

http://www.michigan.gov/documents/mpsc/21stcenturyenergyplan_185274_7.pdf. 38   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. 39   2008 Mass. Acts 50 (amending Mass. Gen. Laws ch. 164B, § 116(a) (2009)). 40   2008 Md. Laws 131 (amending MD Code Ann., Pub. Util. Cos. § 7‐211(b)(2) (2009)). 41   2008 Pa. Laws 129 (amending 66 Pa. Cons. Stat. § 2806.1 (2009)). 42   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.”) 43   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.    44   “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). 45   Several states have already implemented demand response programs, from which useful lessons can be

drawn.  Appendix 3 discusses specific case studies of demand response programs and policies in various states

and regions.
National Action Plan on Demand Response – DRAFT –  

28   

deployment of many innovative demand response applications that create greater consumer

control over energy usage and create new cost‐saving opportunities for consumers.   

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.   

The actions identified in this section are the result of the outreach and stakeholder processes

described above, which included significant input from state agencies themselves.  Overall, the

actions associated with technical assistance to states in the Discussion Draft received favorable

comments.  No additional actions were recommended, and no recommendations were made to

remove any actions.  Most comments during the Discussion Draft process, including the

technical conference, focused on how to implement these actions.  The key changes

recommended in the comments focused on disseminating information and education through

online media channels, leveraging the infrastructure of existing organizations to disseminate

information and education, and focusing more on regional events than on national events.  In

light of these comments, the technical assistance actions included in the National Action Plan

focus more on disseminating information, providing direct assistance, and leveraging existing

efforts.   

The technical assistance elements identified below are meant to be complementary, but the

lead federal agency, with input from the Coalition, would oversee dissemination of useful

information and support to state policymakers.  With additional funding, research, and

monetary support, the federal agency, with input from the Coalition, would oversee the

development, implementation, and evaluation of innovative demand response solutions.   

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, a national forum on demand response would

be held for federal agencies, state public utility commissioners, state energy offices,

gubernatorial offices, state legislators, state consumer counsels, utilities, and other key

stakeholders.  A forum of this scale focused on the National Action Plan would provide a useful

opportunity for the federal agency, with input from the Coalition, to present the overall vision
National Action Plan on Demand Response – DRAFT –  

29

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.  

The forum should be a stand‐alone, one‐day session, likely in Washington, D.C., or following

another national conference (e.g., a meeting of the National Association of Regulatory Utility

Commissioners).  The forum also could be integrated with an existing third‐party forum 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, and subject to funding availability, the federal agency, with

input from the Coalition, would oversee the development of a series of annual meetings.  The

purpose of these meetings would 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 should 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

ideal time would be in the fall, when the results of summer demand response efforts would be

known.  The forum should run no longer than two days.  Subject to funding availability, the

federal agency, with input from the Coalition, would oversee awards of stipends or scholarships

— based on a person’s involvement in regional or state education sessions — to encourage in‐

person participation by offsetting travel costs.  In addition, these meetings could 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, 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 could 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.   
National Action Plan on Demand Response – DRAFT –  

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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.

 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.

The federal agency, with input from the Coalition, should oversee the recruitment of 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

California Public Utilities Commission (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/
National Action Plan on Demand Response – DRAFT –  

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Conduct Communications Training for State and Local Governing 

Officials 

Purpose Educate state and local governing officials on how to communicate with customers about

demand response.

Expected

Outcome

Enhanced knowledge and skills on the best means to communicate with customers and

stakeholders about demand response benefits, economics, markets, and legislative initiatives.

Communications training programs or meetings should be provided to state and local governing

officials, possibly as a part of regional workshops.  This communications training is described in

greater detail in section 2.2.  Such training would offer an opportunity to share findings from

consumer research and demand response experts, provide message training for engaging

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.

Example

Covering Kids & Families

As a part of the Robert Wood Johnson Foundation’s

“Covering Kids & Families” initiative, aimed at enrolling

eligible children in available public health insurance

programs, the foundation and its consultants conducted an

annual communications training conference aimed at training

spokespeople from the grassroots and state levels to

advocate on behalf of children’s health coverage.  The

conference taught participants how to reach out to the news

media to get news stories written about the issue, how to use

current research findings in interviews and speeches, how to

do on‐camera interviews successfully, and how to conduct a

meeting with a lawmaker or other decision‐maker.  
National Action Plan on Demand Response – DRAFT –  

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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.

Through this action, the federal agency, with input from 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.

The federal agency, with input from the Coalition, would oversee the development of a model

and a process to populate and manage a panel (or directory) of demand response 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 healthcare‐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 the federal

agency 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 to

recommend an appropriate expert.  Regardless of the method, the entity sponsoring an event

in which a panelist will participate would be responsible for selecting the appropriate panelists

for their event.  
National Action Plan on Demand Response – DRAFT –  

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Sponsor Technical Papers 

Purpose Generate new knowledge or synthesize existing knowledge to inform 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

PIER) 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 federal

agency, with input from the Coalition, would oversee the development of a series of

informational, technical, research, or policy papers targeted to various practical aspects of

demand response implementation.  These papers should be disseminated through the

clearinghouse discussed below in section 2.3.  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.   

Though the federal agency would oversee the development of this research, neither the federal

agency nor the Coalition should perform this research.  Rather, the primary role for the

Coalition should be to assist the federal agency in developing and prioritizing topics of interest.  

Subject to funding availability, the federal agency, with help from the Coalition, also could

solicit research proposals from national laboratories, academic institutions, utilities,

independent researchers, consultants, and other entities; and then award funding to proposals

that have merit.  Proposal solicitation should embrace both primary (original) research and

secondary (meta‐analysis‐type) research, with an emphasis on the latter to bring forward

existing proprietary research commissioned by utilities.  Subject to funding, the federal agency,

with input from the Coalition, should oversee the review of proposals and funding of grants

possibly in partnership with an organization already involved in this type of work, such as a

university or national laboratory.  There also could be crossover between a demand response

research agenda and an energy efficiency research agenda (for example, in the social‐

behavioral area), so there should be an attempt to align research with these other areas.   
National Action Plan on Demand Response – DRAFT –  

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In developing a list of possible areas for further research, some potential resource and research

gaps have been identified.  To fill these resource and research gaps, research topics are listed in

Appendix 2, where they are organized by whether the research topic relates more to social

science46 research or technical issues.  The federal agency, with input from the Coalition, should

oversee the prioritization of topics, identification of additional topics, and selection of a subset

as candidates for further research.     

Establish a Program for Technical Assistance for Demand Response 

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 requests is a core activity in any

effort to provide technical assistance to states.  The 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 on‐site technical assistance with demand response implementation.  

Subject to available funding, the federal government, with input from 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, or to providing on‐site technical help (for a day, a week, or longer).  

Depending upon the nature of the services requested, experts may provide assistance through

a variety of compensation approaches (fee, barter, or professional requirements such as pro

bono in the legal field).  This program should 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.  

 National laboratory staff.

 Consulting firms specializing in operational and dispatch algorithms to allow demand

response to be incorporated as a resource, similar to generation resources.

                                                      

46 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.
National Action Plan on Demand Response – DRAFT –  

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 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.

 Consulting firms specializing in demand response communications and marketing.

 Other knowledgeable individuals.

Establish a Demand Response Grant Program 

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).  However, many states are not structured for

distributing grants.  In addition, demand response related topics are not the focus of existing

funding vehicles, such as DOE’s Small Business Innovation Research (SBIR) grants, which does

not include in its technical list topics related to demand response.47  In contrast, the American

Reinvestment and Recovery Act48 has awarded $3.4 billion for smart grid investments (and

other awards for demonstration projects which together add up to $4.5 billion), which include

demand response programs.

In recognition of these challenges, and subject to funding availability, the federal agency, with

input from the Coalition, could oversee a national demand response grant program.49  The

purpose of the demand response grant program would be to fund the development, testing

through pilots, implementation, and evaluation of demand response innovations.  Because

innovations can emerge from a variety of sources, any legal entity, public or private, should be

eligible to apply for a grant.  The federal agency, with Coalition input, should oversee the grant

review process, in alignment with the DOE programs already in existence, including recruiting

qualified people to serve as reviewers.  Reviewers could evaluate and score grants based upon

criteria established by the Coalition.  The criteria should favor programs, products, services, and

technologies that have the potential for maximum, sustained deployment of cost‐effective

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.

                                                      

47 For more information about DOE’s Small Business Innovation Research and Small Business Technology

Transfer Programs Technical Topic Descriptions, visit

http://www.sc.doe.gov/sbir/Solicitations/FY%202010/Table_of_contents_sub.htm (last visited Feb. 16, 2010). 48     Pub. L. 111‐5, 123 Stat. 115 (2009). 49 This grant program could either be a stand‐alone program or be developed within the existing ARRA grant

program.
National Action Plan on Demand Response – DRAFT –  

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Once grant winners are announced, an entity that has an existing grants administration

infrastructure, working in conjunction with the Coalition or a national laboratory, should

oversee the relationship with the grantee, from award to final report.  The grant program

should be subject to Congressional authorization.

Examples

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

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.   

A national communications program should be multi‐faceted 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 also must be highly adaptable and scalable to individual
National Action Plan on Demand Response – DRAFT –  

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states, utilities, load‐serving entities, and other demand response providers.  Simultaneously,

the program would benefit from the coordinated research and insight that only a nationwide

program can provide.  It must not dictate a single message, which may not apply to all

customers or electricity stakeholders; instead, it should provide a framework of messages that

universally appeals to customers, but which 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 for this National Action Plan.  In their

comments, many stakeholders strongly supported local implementation of the national

communications program and stated that the federal government, or a national organization,

should not communicate directly with residential and small commercial customers about

demand response.  These stakeholders believed that states, load‐serving entities, utilities, and

other demand response providers are best positioned to communicate directly with customers.  

In response to this advice, this section has been revised to clarify that the federal agency, with

input from the Coalition, would support local implementation through oversight of the

development of research‐based messages, communications tools, and case studies for

interested local demand response implementers50 to use in their own communications with

customers.  Stakeholders largely supported conducting foundational customer research as a

critical first step in the national communications program, but many recommended that the

national communications program should first compile and examine existing market research.  

A new step, compiling case studies, has been added in response.  Stakeholders supported

providing communications assistance to states and policymakers, and developing

communications toolkit materials for local demand response implementers, so these sections

have been expanded and elaborated upon accordingly.

The multi‐faceted structure of the national communications program would mean that it would

develop and support communications through multiple channels and media to communicate as

                                                       50     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.
National Action Plan on Demand Response – DRAFT –  

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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 federal agency, with input from the Coalition, would oversee direct outreach 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 would 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 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 would 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.  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.   

Figure 3 shows the proposed national communications program structure, outlining the

program and message development tasks to be overseen by the federal agency with input from

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
National Action Plan on Demand Response – DRAFT –  

39

Local

Implementation

Direct

Outreach

Program Development:

‐ Compile case studies

‐ Identify demonstration

program sites

‐Disseminate materials

‐Evaluate results

Message Framework

Development:

‐ Conduct foundational research

‐ Develop adaptable messages

‐ Position demand response as

part of overall smart energy use

‐ Develop communications

materials, tactics and toolkits

‐Develop support materials

tailored to large C & I customers

‐ Assistance to

states and

policymakers  

‐National

Partnerships

‐ Support for

demonstration

programs

‐ Support for other

demand response

programs  

Communications Umbrella

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 4 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.

Figure 3: Program Structure
National Action Plan on Demand Response – DRAFT –  

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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 upon the circumstances faced in various

regions, it may be difficult and inappropriate to develop a “one‐size‐fits‐all” message.51  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 federal

funds, 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 upon the availability of financial resources.  

                                                      

51 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.

Program initiation     Program development     Ongoing program  Adjustments made 

Key: horizontal axis represents time

Figure 4: Program Development and Rollout Sequence Over Time

Coalition formation

Foundational research

National partnerships pursued

Messages adjusted

Lessons compiled

Customer‐friendly messages released

Communications with states and policymakers

Message and material development
National Action Plan on Demand Response – DRAFT –  

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However, stakeholder comments reflected strong opposition to such an effort.  Such opposition

included undertaking such an effort would be premature at the outset given the limited

opportunity for such customers to participate in and capture the potential value of demand

response programs, as well as the fact that one single message may not resonate equally with

all customers nationwide.  This more conventional approach might confuse customers because

many load‐serving entities and other demand response providers have already been

communicating (in some cases for years) with customers about demand response with differing

messages and under different program names.  Load‐serving entities and other demand

response providers have also noted that, generally, industrial electricity customers are already

well‐versed in demand response and therefore do not require the extensive outreach and

education that residential and some commercial customers do.

For these reasons, a national communications program overseen by a federal agency, with

Coalition input, and that supports local implementation efforts rather than initiating a national

mass media campaign has the greatest potential for success.  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 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.  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 energy‐consuming

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 and energy efficiency.  (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 policy

that could complement their smart grid, renewable energy, and environmental goals.
National Action Plan on Demand Response – DRAFT –  

42   

 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 clearly defined objectives and measurable goals, the development of which

would be overseen by the federal agency with input from 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 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 should have the following structural elements:

 Communications Umbrella

o Program development

o Message framework development

 Local implementation  

o Support for demonstration programs

o Support for other demand response programs

 Direct outreach

o Communications assistance to states and policymakers

o Partnership development

Each of these elements will be discussed in further detail below.
National Action Plan on Demand Response – DRAFT –  

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Communications Umbrella 

Purpose Provide a consistent communications program message framework, based on 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 upon which to base national, regional,

state, and local communications efforts.  Figure 5 illustrates this relationship.

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:

Communications

Umbrella

Local

Implementation

Provide market

research, a

consistent

messaging

framework,

communications

tools and support

to local

implementers.

Implement

nationally‐

supported

demand response

programs and

communications

campaigns, and

provide lessons

learned to inform

other programs.

Figure 5: Interaction Between the Communications Umbrella and Local Implementation
National Action Plan on Demand Response – DRAFT –  

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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.     

2. Develop a consistent message framework based on foundational market research that

utilities, load‐serving entities, or other demand response providers and stakeholders can

independently tailor to their own local audiences to foster greater demand response

participation.  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 foundational market research, developing adaptable

customer‐friendly messages, positioning demand response as a component of smart energy

use, developing communications materials and toolkits, and developing support materials

tailored to large commercial and industrial customers.  As explained previously in Figure 5,

some of these tasks will occur concurrently.
National Action Plan on Demand Response – DRAFT –  

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 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 federal agency, with input from 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,52 there is no single repository for customer research, message testing,

behavioral data, and the like.  The federal agency, with Coalition input, would oversee the

collection of such 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.

While compiling this research, the Communications Umbrella would work with the entities that

had conducted the research to ensure that no data would be released within the Coalition or to

a broader audience that violates customer privacy or confidentiality.  Further, the federal

agency would oversee redaction (as necessary) of any information deemed proprietary to a

particular stakeholder to encourage the sharing of research to inform the national

communications program.  

Identify demonstration program sites

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 provides input and feedback to inform others.  The federal agency,

with input from 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

Because the federal agency would be accountable to Congress for the results of implementing

the National Action Plan, the Communications Umbrella would engage in ongoing program

                                                      

52   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.
National Action Plan on Demand Response – DRAFT –  

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evaluation.  The federal agency, with input from 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

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.

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.53  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.

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.   

Formative research would help in assessing customer assumptions, 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, 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 capability?

                                                       53   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.
National Action Plan on Demand Response – DRAFT –  

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 What messages are most effective to help customers understand what demand

response is?  

 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), 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, “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.54  This knowledge would

                                                      

54   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,
National Action Plan on Demand Response – DRAFT –  

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inform the overall strategic and tactical recommendations developed through the

Communications Umbrella for use by local programs.

Develop adaptable, customer‐friendly messages

The majority of stakeholder comments stated that “demand response” is not a customer‐

friendly 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 federal

agency, with input from 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 upon 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 2 provides examples of message categories for diverse

audiences.  The federal agency, with input from 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.55

                                                                                                                                                                              

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. 55   Note that the technical assistance would help to provide the underlying factual basis for the content of the

message.
National Action Plan on Demand Response – DRAFT –  

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Table 2: Segmentation of Message Framework

Audience/“Who” Message Content/“What” Messenger Delivery/“When”

Key stakeholders Be a part of the Coalition to lead the

demand response program

Federal Agency Immediately/ continually

(as outreach begins in

new states)

All stakeholder

leadership

Implement your demand response goals

with our support

Federal Agency/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

Federal Agency/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

Federal Agency/Coalition Short‐term, medium‐

term, long‐term

Stakeholder leadership in

non‐demand response

states

Look at success in other states and

localities as a potential roadmap; we can

help you achieve your unique goals

Federal Agency/Coalition Medium‐term, long‐term

(continually as success

stories and best

practices emerge)

State and local governing

officials

Support customer interest in

implementing and receiving benefits of

demand response  

Federal Agency/Coalition Short‐term/ongoing

Utilities, load‐serving

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

Federal Agency/Coalition Short‐term/ongoing

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

Federal Agency/Coalition,

utilities/load‐serving 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/load‐serving entities,

public utility commissions,

Federal Agency/Coalition, other

demand response providers

Medium‐term, long‐term

(continual roll‐out 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/load‐serving entities,

public utility commissions,

Federal Agency/Coalition, other

demand response providers

Medium‐term, long‐term

(continual roll‐out 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

Federal Agency/Coalition,

utilities, load‐serving entities,

schools, other demand

response providers

Medium‐term, long‐term

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)

Federal Agency/Coalition, other

demand response providers

Short‐term/ongoing

Renewable resource

developers

Partner with demand response for

ancillary services

Federal Agency/Coalition Short‐term, medium‐

term, long‐term
National Action Plan on Demand Response – DRAFT –  

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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 — 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 federal agency and Coalition input will help to

determine whether these messages or others are appropriate and whether they motivate

customers to change their behavior.

The Communications Umbrella could also 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.   
National Action Plan on Demand Response – DRAFT –  

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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

communications 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 costs, the materials could be designed so 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 Auto‐

DR 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 federal agency 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.   

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 they could use to create their

communications programs or to supplement local communications.  Toolkit materials

(explained in greater detail in the “Support for Other Demand Response Programs” section
National Action Plan on Demand Response – DRAFT –  

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following) 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.   

Working at the national and local levels, depending on the customer, the federal agency, with

Coalition input, would oversee outreach to large companies to inform them of opportunities to

provide demand response and receive bill savings or direct payments for doing so.  This

outreach would showcase how demand response can be made available through distinct

messages and template materials geared toward large‐scale customers.  These materials would

be available to national chain retailers, Coalition members, and state and local stakeholders

(e.g., utilities, load‐serving entities, and other demand response providers), interested in

distributing them to large local customers.   

Materials would include best practices and model program guides that 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.  

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
National Action Plan on Demand Response – DRAFT –  

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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 American Recovery and

Reinvestment Act of 200956 stimulus smart grid grants.  For instance, recipients of stimulus

grants 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 local demand response initiatives,

seasonal peak load patterns, and any other regional factors.   

The strategy recommended for communicating messages around local demand response

implementation would be an integrated communications program, not reliant on one particular

communication method or medium.  The integrated marketing elements recommended and

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 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:

                                                      

56   Pub. L. No. 111‐5, 123 Stat. 115 (2009).
National Action Plan on Demand Response – DRAFT –  

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o Television

o Radio

o Outdoor media such as billboards and advertisements on buses

o Direct mail

o Internet  

o 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 which

would be available digitally for stakeholders‘ use (e.g., brochures, videos, PSAs, and a

reference website).   

 Viral57 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:

o The creation of groups within social media sites like Facebook and Twitter, as

well as new sites as they gain popularity.

o The engagement of third‐party “demand response champions” who can blog or

tweet about it.

o 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.

                                                      

57 “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.
National Action Plan on Demand Response – DRAFT –  

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Example

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 into 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.

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 federal agency, with input from

the Coalition, would 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, federal grants (as described in

section 2.1), states, or localities could fund local implementation of toolkit‐based

communications efforts; however, the federal agency would fund initial development of the

tools in the toolkit.   

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
National Action Plan on Demand Response – DRAFT –  

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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.

 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

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‐to‐School 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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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.  As discussed in section 2.1, communications training for state and

local governing officials would help achieve the National Action Plan’s objectives and support

the national communications program.  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 federal agency overseeing, with

Coalition input, the provision of communications assistance to state and local governing

officials and stakeholders to allow them to properly assess and understand demand response.  

Such communications assistance might include:  1) communications training 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 federal agency 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.   

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,
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partnerships among trade associations like 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 that such

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.  However, in some cases, such as partnerships aimed at

reaching low‐income, elderly, or disabled electricity customers, the federal agency may decide

to oversee funding offered to selected nonprofit partners.  It would do so to fund outreach of

messages 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

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 cost to 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 federal agency with input from the Coalition 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 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.
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Based upon stakeholder input to the Discussion Draft 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 well‐designed 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 with the most current information and analyses

on demand response.

With input from the Coalition, the federal agency should oversee the management of the web‐

based clearinghouse for demand response and the dissemination of information and analyses

rather than conducting and reporting independent analyses.  However, the web‐based

clearinghouse for demand response should 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.

  

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.58  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 American Recovery and Reinvestment Act) in

September 2009.59  Based on preliminary information, the Smart Grid Information

Clearinghouse may include a significant amount of the demand response materials

recommended for the web‐based clearinghouse in the National Action Plan.60  The Smart Grid

Information Clearinghouse is expected to launch publicly in September 2010.61

                                                      

58 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. 59   Rich Sedano, Smart Grid Information Clearinghouse, Presentation to NARUC‐FERC Smart Grid Collaborative,

available at http://www.narucmeetings.org/Presentations/FercSmartGrid_Sedano.pdf.    60    Id. 61    Id.  
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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 market penetration of renewable energy resources.  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...”62  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 objectives of the web‐based clearinghouse should 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

should shift to identifying model programs and policies as well as prioritizing findings from the

research that has been conducted.

The following sub‐sections describe the types of content that the web‐based clearinghouse

should include.

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.

                                                       62     See California Measurement Advisory Council, http://www.calmac.org/ (last visited Jan. 21, 2010).
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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.63  Also, California’s Energy Action Plan set

a target reduction in peak demand of 5 percent for 2007.64  When the three investor‐owned

electric utilities only achieved 40 percent of that target in 2007, the utilities were asked to

revamp their efforts.  Simultaneously, the California Public Utilities Commission approved

business cases for the deployment of AMI by all three utilities65 and then issued a landmark

ruling making dynamic pricing the default tariff for all non‐residential customers who were part

of AMI.  Information about California’s Energy Action Plan, coupled with up‐dates about how it

is being carried out, would help other states if they undertake similar efforts.

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, 2008.66  The identified resource needs

must first be met through all available energy efficiency and demand reduction resources that

are cost‐effective, reliable, and feasible.67  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.68

                                                      

63   Id. 64   Id. 65   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). 66   Conn. Gen. Stat. § 16a‐3a (2008). 67   Id., § 16a‐3a(c). 68   Id.
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Database of Pilots, Programs, and Markets 

Different types of demand response programs exist 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).69

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 Conditioning70 program and

California’s “Flex Your Power” campaign to promote customer awareness of pending energy

shortages and encourage reduced energy use.71  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.

Quantitative and Qualitative Summaries 

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 listing of each

demand response program and product being offered, peak demand impacts from demand

                                                       69   The web‐based clearinghouse should serve as a central location for communications materials as well.  For

information on these materials, see section 2.2. 70   DTE Energy, Interruptible Air Conditioning Rate (2009),

http://www.dteenergy.com/residentialCustomers/billingPayment/rates/electric/interruptibleRates.html. 71   For more information about the Flex Your Power campaign, visit http://www.fypower.org/.
National Action Plan on Demand Response – DRAFT –  

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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.72  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.73  The

results of these efforts should be included as part of the web‐based clearinghouse.

In addition to quantitative data, the clearinghouse would also collect detailed qualitative

information.  For example, the clearinghouse should 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 clearinghouse could also include or provide linkages to quantitative and qualitative

information on demand response developed by other entities.  For example, the U.S. 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.

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 and pilot results to highlight

                                                      

72 Assessment of Demand Response and Advanced Metering, supra note 11 73 NERC, Data Collection for Demand‐Side Management for Quantifying Its Influence on Reliability: Results and

Recommendations (2007).
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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.74  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 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 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‐to‐

date 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.

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 or 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

                                                      

74   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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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 federal agency, with input from the Coalition, will 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.75  

NIST has allocated $5 million of its American Recovery and Reinvestment Act funding for this

purpose.76  Over the past year, NIST has launched the initial stages of its broad effort, including

creating Domain Expert Working Groups (in conjunction with DOE) to focus on areas of focus

and developing an Interoperability Knowledge Base to promote shared understanding and

terminology.77  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

use its web‐based clearinghouse to track the efforts to develop standards and protocols.

There are many examples of standards and protocols that should 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 (PHEVs)

and fully electric vehicles, and measurement and verification standards.

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

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.78  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

                                                      

75   More information and a summary of recent activity can be found at http://www.nist.gov/smartgrid/. 76   See id. 77   See id. 78   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 end‐use participant or customer systems.”  
National Action Plan on Demand Response – DRAFT –  

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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.

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.

Nationwide standards for charging stations for PHEVs and electric vehicles also should be

adopted.79  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.   

Finally, development of measurement and verification standards is needed at both the

wholesale and retail levels.  Methods for measuring and verifying demand response reductions

vary significantly across the country at present, and measurement and verification 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.80  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.

                                                      

79   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=114

1. 80   NAESB, M&V for Demand Response Programs (2009), available at

http://naesb.org/pdf4/dsmee_group2_070709reqcom_attach.doc.
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Develop or Enhance Demand Response Estimation Tools and Methods 

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, load‐serving 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 in the 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.

With input from the Coalition, the federal agency would 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 cost‐effectiveness.  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 would 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.

These tools and materials would be tailored to circumstances in wholesale and retail markets,

and tailored to restructured markets and non‐restructured 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 to maximize the amount 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
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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 sub‐sections 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 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, with input from the Coalition, should facilitate a deeper understanding of

how demand‐side programs should be accurately integrated into what have traditionally been

more supply‐side‐centric modeling frameworks.

Additionally, through the National Assessment, FERC staff and contractors developed a tool for

estimating the state‐level potential for demand response under a variety of scenarios.81  This

tool was the 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 to bridge the gap between estimates of demand

response potential and existing capacity expansion plans, FERC staff and contractors are 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

                                                      

81   The model is available at http://www.ferc.gov/industries/electric/indus‐act/demand‐response/dr‐

potential.asp.
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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.82

Another example comes from the Building Energy Software Tools Directory.83  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 upon a set of assumptions and variables.84

A final example of an analysis tool comes from the Rocky Mountain Institute (RMI).  RMI

developed a dispatch model of what they call the Next Generation Utility.85  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

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.

                                                      

82   For more information about the InterAct tool, visit

http://www.pge.com/mybusiness/energysavingsrebates/demandresponse/tools/. 83   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/. 84   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. 85   For more information about RMI’s dispatch model, visit http://ert.rmi.org/research/next‐generation‐

utility.html.
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Example

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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Example

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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Example

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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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.86  The cost‐effectiveness tests defined in the report are used by utilities

and regulators across the United States and abroad.  The federal agency, with input from 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 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.

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, with input from the Coalition, should 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

                                                      

86   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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to help 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, with input from 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.”87  With

                                                      

87     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), order on reh’g, Order
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input from the Coalition, the federal agency should oversee the development and

implementation of a methodology to facilitate the incorporation of 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 

In order 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.  

To a certain extent, real‐time pricing (RTP) programs already provide information about the

price of energy to participants.  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 email 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, with input from the

Coalition, should 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 off‐peak,

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.88  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.89  However, Connecticut Light & Power’s recent pilot

had different results:  the Energy Orb did not provide any incremental demand response

                                                                                                                                                                              

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). 88   Nexus Energy Software et al., Information Display Pilot (2005). 89   The Brattle Group, BGE’s Smart Energy Pricing Pilot: Summer 2008 Impact Evaluation, (2009) (prepared for

Baltimore Gas & Electric Company).
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benefits.90  Regardless, the device serves as an example of a tool that could be used to provide

information about price signals to customers.

In Table 3, is a list of the strategies and activities described in the Draft National Action Plan.   

                                                      

90   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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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.

Sidebar 3: The DRIVE Model 
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Table 3: Strategies and Activities

Requirements for Technical Assistance 

 Establish a National Forum

 Conduct Informational and Educational Sessions for Policymakers and Regulators

 Conduct Communications Training for State and Local Governing Officials

 Build a Panel of Demand Response Experts

 Sponsor Technical Papers

 Establish a Program for Technical Assistance for Demand Response

 Establish a Demand Response Grant Program

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

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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Appendix 1: Coalition Examples 

The National Action Plan for Energy Efficiency 

In 2006, a group 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 joined together to release the National Action Plan for

Energy Efficiency.

91  Together, these stakeholders recognized that energy efficiency remained a

critically underutilized resource in the nation’s energy portfolio, and they published their

National Action Plan for Energy Efficiency as a call to action to increase investment in energy

efficiency.  To oversee their continued work in this arena, these stakeholders formed a

Leadership Group, which is a private‐public initiative that operates with a limited budget and

support from DOE and EPA.  The Leadership Group neither sets standards or protocols for

energy efficiency, nor issues grants for program design, implementation, or monitoring.   

The overarching goal of the Leadership Group is to create a sustainable, aggressive national

commitment to energy efficiency through gas and electric utilities, utility regulators, and

partner organizations.  The National Action Plan for Energy Efficiency spells out five key

consensus recommendations for promoting energy efficiency:

 Recognize energy efficiency as a high‐priority energy resource.

 Make a strong, long‐term commitment to implement cost‐effective energy efficiency as

a resource.

 Broadly communicate the benefits of and opportunities for energy efficiency.

 Promote sufficient, timely, and stable program funding to deliver energy efficiency

where cost‐effective.

 Modify policies to align utility incentives with the delivery of cost‐effective energy

efficiency and modify ratemaking practices to promote energy efficiency investments.92

The National Action Plan for Energy Efficiency is accompanied by a tool for estimating the

benefits of energy efficiency.  It also envisions providing experts and resource materials to

parties who are interested in pursuing energy efficiency.  The document notes that success

requires the joint efforts of customers, utilities, regulators, states, and other partner

                                                       91   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. 92   Id. at ES‐2, ES‐6 to ES‐9.
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organizations.93 As of January 2010, more than 120 organizations have endorsed these

recommendations and/or made commitments to promote energy efficiency within their

spheres of influence.   

Following the release of the National Action Plan for Energy Efficiency, the Leadership Group

published its Vision for 2025,

94 which identifies 10 implementation goals and measures the

progress made so far.  Among the goals are developing regulatory processes to provide utility

incentives for investing in energy efficiency, developing cost‐effectiveness tests, establishing

measurement and verification protocols, developing state policies to ensure robust energy

efficiency practices, implementing information sharing and delivery systems, and implementing

advanced technologies.95  The Leadership Group has developed a suite of additional technical

assistance resources to help parties achieve all cost‐effective energy efficiency by 2025. These

resources are publicly available at www.epa.gov/eeactionplan.  Recently, the Leadership Group

has undertaken further activities that are described in Sidebar 2.

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 auto 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.96  With primary funding from General Motors and the

Insurance Institute for Highway Safety, this coalition 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.97  

The campaign sought to:  

1. Form a coalition of diverse interests to oversee and fund the campaign.

2. Choose one target state to kick off the campaign, letting that state be one of the

campaign’s messengers.

3. Engage local leaders and stakeholders as messengers, and bring them into the coalition.

4. Measure results through rigorous survey methods.

5. After demonstrating success, expand the program to other states while maintaining a

presence in all prior states.

                                                      

93   Id. at 1‐2. 94   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. 95 Id. at ES‐2 to ES‐7. 96 For more information about the Air Bag and Seat Belt Safety Campaign, visit http://www2.nsc.org/airbag.htm. 97   A description of a similar demonstration model program, a later iteration of the seat belt campaign, is

available at

http://www.nhtsa.dot.gov/portal/nhtsa_static_file_downloader.jsp?file=/staticfiles/DOT/NHTSA/Vehicle%20S

afety/Articles/Associated%20Files/811014.pdf.
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6. After demonstrating success in many states, take the campaign to the national

audience.

To raise awareness among the public, the national coalition provided media and organizational

outreach materials to states and communities so they were well‐prepared to serve as

spokespeople for the effort even if they were not demonstration program states, and provided

intensive, on‐the‐ground support to key demonstration markets.

In the first year of the campaign, the coalition conducted a communications demonstration

program in North Carolina, based on a number of factors that made it a suitable launch site,

most importantly that it had a supportive governor and law enforcement community, both of

whom would be critical to the program’s success.  Over the next few years, the coalition

broadened its outreach into eight southeastern states based on those states’ receptivity, and

finally broadened into a fully national campaign as the demonstrable effectiveness of the

outreach became convincing.  That effectiveness led to Congressional funding of more than $10

million per year for advertising, to further the public education effort.98

As a result of the coalition’s work in demonstration states, and then nationally, 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 2005.99  Child fatalities from traffic crashes dropped by 20 percent, and proper

restraint use among toddlers jumped dramatically from 60 to 94 percent.100  In addition, in

2004, the fatality rate on the nation’s highways was the lowest since record‐keeping began 35

years ago.101

                                                      

98   S. Rep. No. 107‐224, at 94‐5 (2003) (noting that preliminary results demonstrated the initiative’s success in

achieving increases in seat belt use). 99   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‐Lifesaving‐Achievements. 100   National Safety Council, Welcome to the Air Bag & Seat Belt Safety Campaign (2004), available at

http://www2.nsc.org/airbag.htm. 101   CNN, Study: Seat Belt Use at an All‐Time High (2004), available at

http://www.cnn.com/2004/US/09/16/seat.belts/index.html.
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Appendix 2: Research Gaps 

In 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 science102 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.  

Social Science Research Issues 

 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

and 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.

 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.  

                                                      

102 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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 Identification of the most cost‐effective demand response programs for customers that

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.

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 like renewable energy; and a calculation of environmental benefits stemming

from the reduced need to build new generation capacity and transmission systems.

 A study of the expected longevity of demand response 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.

 A study of how plug‐in hybrid electric vehicles (PHEVs) 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 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 pace of installation, the functionality of the

devices, and dealing with rapid product obsolescence due to swift technology

advancement.

 Smart metering for residential customers, covering such topics as categories and

characteristics of various smart metering systems, cost‐effectiveness, setting up the
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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 such topics 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 in order 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.

 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 the development of a federal demand response mandate, and assess the

impact of cutting off funding to states that refuse to participate in 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 such topics 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.
National Action Plan on Demand Response – DRAFT –  

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 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.
National Action Plan on Demand Response – DRAFT –  

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Appendix 3: Examples of Existing Demand 

Response Programs 

This appendix presents a few examples of existing demand response retail and wholesale

programs around the United States.  To put these case studies in context, Figure 6, which is

taken from the National Assessment, shows the regional variation in the national potential for

demand response.

0%

5%

10%

15%

20%

25%

30%

Pacific East

North

Central

Middle

Atlantic

West

North

Central

New

England

West

South

Central

East

South

Central

Mountain South

Atlantic

% of Peak Demand

Business-as-Usual Expanded BAU Achievable Participation Full Participation

12% 12% 12% 13% 10% 20% 17% 20% 19%

"Gap" between BAU and Full Participation:

Figure 6:  Regional Demand Response Potential
National Action Plan on Demand Response – DRAFT –  

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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.  In order 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 over two decades.103  During this time, they have attracted some 30 to 40

percent of the residential market.104  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.105  Typical TOU customers on this program lower their bill by 7

percent.106  What is noteworthy is that these effects were obtained without the intervention of

enabling technologies.   

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.  

California 

California is a leader in exploring and expanding demand response.  For instance, the California

Energy Commission issued regulations instituting mandatory time‐of‐use pricing for large

commercial and industrial customers in 1978.  In addition, regulations for appliance and

building energy consumption107 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.108  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.109   

The Energy Action Plan also set a target reduction in peak demand of 5 percent for 2007.110  

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

                                                      

103   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). 104 eMeter, Demand Response: An eMeter White Paper Presentation (2008). 105   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. 106 Id. 107   Cal. Code Regs. tit. 20, §§ 1601–1608 (2009) (efficiency standards for appliances); Cal. Code Regs. tit. 24.   108   California Energy Commission, 2007 Integrated Energy Policy Report, at 3–4 (2007). 109 State of California, Energy Action Plan, at 4 (2003). 110   Id.
National Action Plan on Demand Response – DRAFT –  

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Commission approved business cases for the deployment of advanced metering initiatives

(AMI) by all three utilities,111 and then issued a landmark ruling making dynamic pricing the

default tariff for all non‐residential 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.112  This program has achieved very high

levels of brand recognition, since it is featured in a number of prominent places such as

billboards, train stations, websites and also on postmarks.

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.113  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.114  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.115  Overall, the

experiment showed that if customers are fully informed, they are more likely to participate in

dynamic pricing programs.

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.   

Connecticut 

The Connecticut legislature passed legislation that required electric distribution companies to

conduct integrated resource planning beginning on January 1, 2008.116  The identified resource

needs must first be met through all available energy efficiency and demand reduction resources

that are cost‐effective, reliable, and feasible.117  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.118

                                                      

111   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). 112 For more information about the Flex Your Power campaign, visit http://www.fypower.org/. 113   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. 114   See id. 115   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). 116   Conn. Gen. Stat. § 16a‐3a (2008). 117   Id., § 16a‐3a(c). 118   Id.
National Action Plan on Demand Response – DRAFT –  

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In summer 2009, Connecticut Light & Power ran a pilot program for demand response in order

to discover how to most effectively reduce electricity usage during peak periods when demand

for electricity reaches a critical level.119  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.120

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 in response.

Delaware 

Legislation in Delaware requires Delaware Power & Light to conduct integrated resource

planning, commencing December 1, 2006.121  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 it proposes to meet its long‐term obligations over the

10‐year period, including the use of demand‐side management programs.122

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.123  

This program includes an automated energy management system for homes that comes along

with a critical‐peak pricing tariff.  The average rate is around 8 cents per kilowatt‐hour and the

critical peak pricing (CPP) tariff applied during the top 1 percent of the hours is four times

higher.124  The system controls four end‐uses:  air conditioning, space heating, water heating,

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.125  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.126  The program is generating interest among other Florida utilities as well.  

                                                      

119   Connecticut Light and Power, Plan‐It Wise Energy Program, http://www.cl‐

p.com/home/saveenergy/goinggreen/planitwise.aspx ( 2009). 120 “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/. 121 Del. Code Ann. tit. 26, § 1002(4) (2009). 122   Id. 123   Gulf Power, Energy Select (2009), http://www.gulfpower.com/energyselect/index.asp. 124   Gulf Management Company, Good Cents SELECT: Advanced Energy Management Program, at slide 6 (2006),

available at www.ewh.ieee.org/r3/nwflorida/presentations/01_19_06.ppt. 125   Id. 126   Thompson J, Gulf Power, Presentation for the Southeast Energy Efficiency Meeting, at 14 (2007), available at

http://www.epa.gov/RDEE/documents/southeast‐
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One is running a pilot to test customer acceptance and response, which is being closely tracked

by the others.   

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.

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 requesting 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.127

This case study indicates that dynamic pricing coupled with enabling technologies can bring

about substantial savings to both the utility and the customer.  

                                                                                                                                                                              

meeting/thompson_southeast_energy_efficiency_meeting_atlanta_ga.pdf (discussing real‐time pricing and

the Good Sense SELECT program at Gulf Power). 127   Email 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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Georgia 

Georgia Power has operated the nation’s largest real‐time pricing program directed at large

commercial and industrial customers since the mid‐1990s.128  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.129  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 day‐ahead

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 high price day,

estimated load reductions rise to 7 percent for day‐ahead customers and 30 percent for hour‐

ahead customers.130

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.131  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 to, at a

minimum, describe its methodology and the manner in which real‐time customers would have

access to hourly and day‐ahead prices.  

In order 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, and was entitled to recover incurred costs in implementing real‐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.

                                                      

128   O’Sheasy M, “How to Buy High and Sell Low: Spot Priced Electricity Offers Financial Rewards,” Pricing in

Competitive Electricity Markets 295 (2000). 129   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). 130   Id. 131   2005 Ill. Laws 977 (amending 220 Ill. Comp. Stat. Ann. 5/16‐101A, 16‐102, 16‐107).   
National Action Plan on Demand Response – DRAFT –  

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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.132  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.133

   

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 program134 and 9 percent in the Ameren

program.135  

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.136  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.137

                                                      

132   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. 133   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. 134   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. 135 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. 136   2008 Mass. Acts 50 (amending Mass. Gen. Laws ch. 164B, § 116(a) (2009)). 137   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=080702_bill

_energy_clean&csid=Agov3.  
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Michigan 

In January 2007, the Michigan Public Service Commission (PSC) submitted its 21st Century

Electric Energy Plan138 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.

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 2030.139  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.140   

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 which 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 extend beyond a standard investigation of load‐shifting

behavior.141  At a high level, this research aims to:  

 Understand how dynamic pricing can best be incorporated into Consumers Energy’s

portfolio.  

 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.  

 Compare consumer response to critical peak pricing against critical peak rebates.  

 Understand consumer responses to real‐time provision of information regarding

electricity usage, during both peak and off‐peak periods.  

                                                      

138   Lark JP, Michigan’s 21st Century Electric Energy Plan (2007), available at

http://www.michigan.gov/documents/mpsc/21stcenturyenergyplan_185274_7.pdf. 139   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). 140    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.   141 Email 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).
National Action Plan on Demand Response – DRAFT –  

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 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.142

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)143 program, which was established over 20 years ago during the days of demand‐side

management.  IAC has grown to over 280,000 enrolled customers (of 1.9 million total

customers, with a 79.1 percent central air conditioning saturation)144 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.  

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.145

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 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.146

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

                                                      

142   Id. 143   DTE Energy, Interruptible Air Conditioning Rate (2009),

http://www.dteenergy.com/residentialCustomers/billingPayment/rates/electric/interruptibleRates.html. 144   Email from Mark Williamson, Manager, Load Research, DTE Energy, to Ahmad Faruqui (Aug. 31, 2009, 1:21 PM

ET) (on file with The Brattle Group). 145   Id. 146   Email from Mark Williamson, Manager, Load Research, DTE Energy, to Ahmad Faruqui (Aug. 31, 2009, 9:48 AM

ET) (on file with The Brattle Group).
National Action Plan on Demand Response – DRAFT –  

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capable of interrupting only customers taking service within substation‐serviced areas.147  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.148  

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,149 is provided in Figure 7.  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.150

This case study provides an example of a billing structure that considers the many regulatory

and information technology factors surrounding the billing of customers.

                                                      

147   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_Program_at_D

etroit_Edison_presentation_.ppt. 148   See id. 149   For more information about this pilot program, please visit http://www.powercentsdc.org/. 150   Emails 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).
National Action Plan on Demand Response – DRAFT –  

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Figure 7:  PowerCentsDC Pilot Program Sample Bill
100

Wholesale Programs Regional transmission organization (RTO) and independent system operator (ISO) program offerings are summa

Name Service Type Trigger Respo

California ISO

Participating Load Program Energy Market bid (energy price > offer price) 1 Participating Load Program Reserve Market bid (capacity bid and separate energy bid > offer price) 10 m

Electric Reliability Council of Texas

Emergency Interruptible Load Service Capacity Reliability 10 mLoads Acting as a Resource Providing Responsive

Reserve Service — Under Frequency Relay Type Reserve Reliability (automatic relay) 0.5 seconds (automatic r

Loads Acting as a Resource Providing Responsive

Reserve Service — Controllable Load Resource

Type

Reserve Reliability

Continuous, similar 

generator; and 10‐minu

obligation to ele

Loads Acting as a Resource Providing Non‐

Spinning Reserve Service Reserve Reliability 30 m

Controllable Load Resources Providing

Regulation Service Regulation Reliability Effectively 

ISO‐New England

Real Time Demand Response Program (Capacity

Component) Capacity Reliability 10 minute

Real Time Demand Response Program (Energy

Component) Energy Reliability 10 minute

151 The information is adapted from the ISO/RTO Council’s North American Wholesale Electricity Demand Response Program Compa

http://www.isorto.org/atf/cf/%7B5B4E85C6‐7EAC‐40A0‐8DC3‐

003829518EBD%7D/IRC%20DR%20M&V%20Standards%20Implementation%20Comparison%20(2009‐04‐28).xls.
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Name Service Type Trigger Respo

Day‐Ahead Load Response Program for RTDRP Energy Market bid (day‐ahead LMP = or > offer price) Effectively Day‐Ahead Load Response Program for RTPR Energy Market bid (day‐ahead LMP = or > offer price) Effectively Demand Response Reserves Pilot Reserve Reliability 30 mReal Time Price Response Program Energy Market bid (day‐ahead or forecast real‐time LMP = or > $100/MWh) Effectively Real Time Demand Response Resource Capacity Reliability 30 mFCM: On‐Peak, Seasonal Peak Resources Capacity Reliability Effectively Real Time Emergency Generation Resource Capacity Reliability Effectively 

Midwest ISO

Emergency Demand Response Energy Reliability Resource‐specific Demand Response Resource Type I Energy Market bid (energy price > offer price) 5 mDemand Response Resource Type I Reserve Market bid (energy price > offer price) 10 mDemand Response Resource Type II Energy Market bid (energy price > offer price) 5 mDemand Response Resource Type II Reserve Market bid (energy price > offer price) 10 mDemand Response Resource Type II Regulation Market bid (energy price > offer price) Effectively 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 m

Demand Side Ancillary Services Program Reserve

Market bid (energy price > offer price) (security‐

constrained economic dispatch) (10 minute /30

minute ramp)

10 minute
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Name Service Type Trigger Respo

Demand Side Ancillary Services Program Regulation Market bid (energy price > offer price) (security‐ constrained economic dispatch) Effectively Emergency Demand Response Program Energy Reliability 2 hInstalled Capacity Special Case Resources

(Energy Component) Energy Reliability 2 h

Installed Capacity Special Case Resources

(Capacity Component) Capacity Reliability 2 h

PJM

Economic Load Response Energy Market bid (self‐scheduled, cleared day‐ahead bid, or real‐time dispatch) ResourEconomic Load Response Reserve Reliability (one hour notice) 10 mEconomic Load Response Reserve Reliability (day‐ahead notice) 30 mEconomic Load Response Regulation Reliability Effectively Emergency Load Response — Energy Only Energy Reliability 1 hour 

(participa

Full Emergency Load Response (Capacity

Component) Capacity Reliability 1 hour 

(participa

Full Emergency Load Response (Energy

Component) Energy Reliability 1 hour 

(participa

Southwest Power Pool

Variable Dispatch Demand Response Energy Market bid (energy price > offer price) (security‐ constrained economic dispatch) 5 mFCM: forward capacity marketLMP: locational marginal priceMWh: megawatt‐hour

RTDRP: real‐time demand response program

RTPR: real‐time price response
 103

Appendix 4: List of Commenters 

The following parties presented comments at the Technical Conference held at the

Commission’s headquarters on November 19–20, 2009:

Party Name

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 parties submitted written comments to the Commission in response to the

Discussion Draft:
National Action Plan on Demand Response – DRAFT –  

104

Party Name

American Public Power Association

Brett Feldman

California Department of Water Resources State Water Project

California Public Utilities Commission

Californians for Renewable Energy, Inc.

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

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

     Summit Blue Consulting
National Action Plan on Demand Response – DRAFT –  

 105

Party Name

Portland General Electric Co.

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

Peak Load Management Alliance

Utility Economic Engineers (Mark B. Lively)

Wal‐Mart Stores, Inc.

Ziphany, LLC