Demand Response FAQ:
Qualification for a DR program varies from region to region, but in general, any customer that is willing to remove their business from the grid when an event has been issued can qualify. Typically, those businesses rely on an installed asset to provide power for the facility, but that is not necessary in all cases.
Your facility requirements will be spelled out in any DR contract. This ensures the grid operator knows in advance what you can and cannot do. No one likes surprises, so clearly defining what your facility needs are is an important step in the process.
You may receive notification by email, phone, text, or fax. The advanced notification depends on which program you are in and which options you have selected.
The Demand Response programs have different requirements for load reductions during declared events. Consequences of not participating or not dropping load can range from no impact if you are in a voluntary program to financial penalties that offset any rate savings in mandatory programs.
Multiple incentives are available to DR participants; from cash payments to reduced electric rates. Each RTO or ISO operates their own energy auction which sets the wholesale energy price for the next 3 years. These wholesale prices are used to calculate what each kilowatt hour is worth and each region offers a different amount based on expected need/demand. Your facility’s past electrical usage is used to establish your rate.
Occasional storms and heat waves, as well as periodic power plant repairs and maintenance have the potential to affect supply and demand of electricity. When demand is high and supply is short, power interruptions can sometimes be the result. Building enough power plants to satisfy every possible supply and demand scenario is one possibility, but the cost and environmental impact of that would be tremendous.
Demand response programs are designed to be both fiscally and environmentally responsible ways to respond to occasional and temporary peak demand periods. The programs offer incentives to businesses that volunteer and participate by temporarily reducing their electricity use when demand could outpace supply.
Demand response provides a way for your company to advance power reliability on your terms. Your voluntary participation will help enhance electricity reliability for everyone—which is great news for you, other businesses, and all residential users. With demand response, you can take small (and big) steps to reduce your electricity demand. By doing so, you'll be giving a whole lot back—and earning incentives, too.
Demand response days are declared when demand for electricity threatens to outpace supply, which typically can occur during hot summer days. Additionally, this can happen if generation facilities are closed for maintenance, transmission lines are damaged, or during periods when the price to purchase added electricity escalates.
We will evaluate your existing assets and make recommendations. Some older equipment will qualify as is, some will require retro-fit with emission controls to qualify for demand response and capacity programs.
Either way, Vector Energy Systems handles all contracting and permitting, as well as the potential funding for any additional equipment or retro-fit.