Thought Leadership

Businesses Can Cut Costs & Help Prevent Power Outages


By Center for Sustainable Energy

June 5, 2018

Demand response programs keep service reliable and offer rewards

As summer heat sweeps into California, it not only raises temperatures, but also demand on the state’s electricity grid as air conditioners and refrigeration systems are turned on and run longer.

Automatic Demand Response Advantages


  • Avoid costly peak demand charges
  • Incentives to pay for new technologies
  • Monthly utility bill savings


  • Grid stability during times of peak usage
  • Reduce greenhouse gases and air pollution
  • Important for integrating renewable energy

The resulting spikes in energy demand can lead to power interruptions and, more critically, blackouts that disrupt lives and hinder business activities. To increase electricity service reliability, utilities offer incentives to consumers through demand response programs that can automatically reduce noncritical power use.

What is demand response?

During a demand response event, utilities ask consumers to lower electrical use to avoid switching on expensive power sources, such as “peaking plants,” that typically are powered by dirty fossil fuels. Events last only a short amount of time, from about an hour up to eight hours. In exchange, customers can receive monthly incentive payments or discounts on regular summer electricity rates.

Traditionally, participation in ADR programs has focused on large commercial and industrial facilities with sophisticated energy management systems, however, current utility offerings make it easier for smaller facilities to consider this investment.

Depending on the facility, responding might be as simple as dimming or turning off lighting or adjusting thermostats to reduce heating or cooling, or be more involved, such as adjusting electrical motors, machinery and refrigeration systems or putting off starting or using certain equipment. Any sized business can benefit from gaining greater control of their energy use by choosing what equipment will be controlled and by how much.

What are ADR technologies?

ADR components include hardware and software that allow a utility to communicate directly to electrical controls at a facility to automatically reduce electrical load during demand response events. The equipment involved and the amount of reduction is predetermined, and the customer can opt out of a specific event to continue regular operations – at a higher electricity cost.

To motivate participation, most utilities provide generous incentives to offset or completely cover the purchase and installation of ADR technologies and offer significant electricity rate reductions, depending on the program in your area.

New training program

While ADR equipment and communications systems have evolved significantly over the past 10-15 years, there continues to be a dearth in training programs that prepare a workforce capable of installing and maintaining ADR equipment.

CSE is leading a $4.5 million ADR training project for the California Energy Commission to expand the pool of qualified ADR technicians and help increase ADR technology adoption. It provides classroom, online and on-the-job training to electrical apprentices.

The program also will enlist 200 small and medium businesses and public facilities in disadvantaged communities into utility ADR programs by offering technical assistance to support the installation of ADR equipment.

Where to learn more

Every business should consider how ADR technologies can reduce operating costs, meet sustainability goals and help keep California’s electrical grid stable and online. Find out about ADR technology incentives and programs offered by California’s three major investor-owned utilities and how you can apply. Visit CSE’s ADR Incentives website.