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In an effort to avoid outages and rolling blackouts now and in the future, California is upping the ante to get more business customers to participate in automated demand response (Auto-DR) programs. Utility companies offer a wide variety of DR programs to help customers temporarily reduce their energy usage during peak times while lowering electricity costs. But still relatively new to California’s energy strategy for 2009 to 2011 are Auto-DR programs—and associated (big) incentives. “For 2010, the technology incentive for demonstrated load reduction is $300 per kW for Auto-DR,” says Anna Chung, project manager for the Technical Assistance and Technology Incentives (TA & TI) and Auto-DR programs at Southern California Edison (SCE).

If you are an SCE customer with demand over 200 kilowatts, your organization is likely enrolled in the Critical Peak Pricing (CPP) program. During the hot summer months when CPP events occur, SCE contacts your organization the day prior to an event to ask you to reduce your energy usage, between 2 p.m. and 6 p.m., according to your load reduction plan. By shifting or reducing electricity use during critical peak events during the summer, your organization benefits from:

  • Lower electricity bills through rate discounts—the CPP program provides reduced monthly on-peak demand charges throughout the summer season
  • Bill protection for the first 12 consecutive months on a CPP rate
  • Reduced greenhouse gas emissions and the ability to help defer the construction of additional power plants

While CPP is a great way to reduce your electric bills in the summer, taking advantage of the Auto-DR program is even better. This makes now a great time to think about installing new systems, such as lighting controls, before the temperature rises—and put your organization in a position to participate in demand events.

DR programs 101

Most DR programs fall into two categories—price responsive and reliability (often called interruptible). Usually, price-responsive programs are warm-weather related. “To avoid rolling blackouts and outages and to relieve congestion on the grid, we ask our DR customers to drop their load and help us avoid purchasing more expensive energy,” explains Chung.

While customers can perform DR actions manually, such as by turning off lights during a demand response event, a more reliable and consistent energy-saving option is to enroll in an Auto-DR program. “With Auto-DR, a customer can, for example, program their software system to automatically turn down the lights, raise the set temperature by four degrees, turn some vending machines off, and shut off outside fountains,” says Chung. With a day’s notice, some industrial customers enrolled in and equipped for Auto-DR have altered their production shifts to stop certain equipment from producing the next batch before the DR event occurs. And if for some reason a customer cannot participate on a given event day, they can override the automated system.

Through its TA & TI program, SCE offers eligible commercial and industrial customers—with more than 200 kW of demand—DR site assessments (at no charge) and financial incentives to enable businesses to cost-effectively install technologies that help reduce electricity use during peak times. After evaluating a customer’s facility, an SCE engineer provides a technical report along with recommended projects (and associated costs) that the customer can implement to take advantage of the benefits of a DR program. Often, SCE’s TA & TI program allows customers to use their Auto-DR incentives to pay for energy saving and technology upgrade projects in full.

Everyone wins with demand response

DR programs provide benefits to everyone because they reduce congestion on the grid and help prevent brownouts and rotating outages that can negatively affect businesses’ productivity and bottom lines. Through DR programs, customers not only benefit from the associated financial incentives and leading technology but from a newfound wealth of knowledge. “Customers without existing energy management systems can take advantage of valuable information to help them better understand their energy consumption and make smart adjustments to their operations to save more money,” says Chung.

To lower its energy use and help improve the environment, Swedish home furnishings retailer IKEA is capitalizing on an SCE Auto-DR solution at its stores in Carson, Costa Mesa, and Covina. Read the whole story here.

Taking advantage of an incentive worth more than $200,000, the Tri-City Corporate Centre mixed use development enrolled eleven of its buildings in an SCE Auto-DR program. Read more here.

The more customers that enroll in Auto-DR programs, the more SCE and other utilities will save. “We like to say that a kilowatt hour saved is the cheapest type of energy because you’re not building infrastructure to support it,” adds Chung. Another big winner is the environment. DR helps eliminate the need to purchase more expensive energy from peak-generating stations, which in turn reduces carbon emissions.

For more information about how your business can benefit from SCE’s Auto-DR programs, contact Monterey Lighting at 909.397.8000 or send an email to