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What is Demand Response?

Demand response is a new way for utility companies and co-ops to deliver power to customers. It has the potential to significantly change the way customers and utilities work together. So what exactly is demand response? Pretty much what it sounds like!

Electricity meter with demand response caption

What you need to know about demand response

Demand response is a way for utility companies and co-ops to more efficiently deliver electricity to homeowners, based on how much electricity is in demand at any given time. Peak demand in the home is in the morning, when we’re all getting ready for work and school, and in the evening, when we all come home to fix dinner, do our household chores, watch TV, or have the neighbors over for a visit.

It’s common sense: when we’re at home we demand more electricity from our utility. When we’re not at home, that level of demand drops. We might only have the HVAC system on, and the usual appliances and electronics humming along in the background. Demand response helps utilities balance that peak demand in the morning and evening with the lower demand in the afternoon and late at night, when we’re out of the house or asleep.

How you can take advantage of demand response

A basic programmable thermostat from Honeywell

Demand response programs may be offered by your utility company or co-op. Check out those inserts in your next utility bill! You may be eligible for real savings every month, just by using your dishwasher and laundry machines in times of lower power demand. Your utility might also offer you “time-based rates,” which can be more or less expensive, per kilowatt-hour, based on the time of day and the demand on the utility’s power generation capabilities. Most time-based rates (they’re also called “peak pricing,” “variable pricing,” “real time pricing,” or similar names) follow the basic law of supply and demand. When demand is high, in the morning and evening, prices are a little bit higher. When demand is low, in the afternoons and late at night, prices will be a little bit lower.

Utilities offer demand based rates to encourage you to use your major appliances, like your dishwasher and laundry machines, at the low-demand times of the day. This can be a win-win situation. . Your utility wins, because they save wear and tear on their equipment. You win because you save money on your electricity costs by using your major appliances in those lower demand times of the day.

What’s next for demand response?

According to the Department of Energy,

The electric power industry considers demand response programs as an increasingly valuable resource option whose capabilities and potential impacts are expanded by grid modernization efforts. For example, sensors can perceive peak load problems and utilize automatic switching to divert or reduce power in strategic places, removing the chance of overload and the resulting power failure. Advanced metering infrastructure expands the range of time-based rate programs that can be offered to consumers and smart customer systems such as in-home displays or home-area-networks can make it easier for consumers to changes their behavior and reduce peak period consumption from information on their power consumption and costs.

Demand response programs are created and managed by utility companies and co-ops. But homeowners, renters, and landlords who choose to participate in utility programs will find real benefits, including saving money on their electricity bills every month.




Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy

Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy

Last month we reported on President Obama’s “All of the Above” energy policy following his State of the Union speech. Especially important for the home performance industry are proposed laws like Shaheen-Portman and the SAVE Act. These will help homeowners take basic steps, like performing home energy audits, and undertaking weatherization, air sealing, and HVAC retrofit and upgrade work, that can be part of everyone’s personal energy policy.

Secretary of Energy Dr. Ernest Moniz wrote a letter to BreakingEnergy.com explaining why and how “All-of-the-Above is Making a Difference Across America.” Dr. Moniz focused on generation in his letter, noting that California’s Ivanpah solar thermal plant will power 100,000 homes thanks to a successful public-private partnership and a loan from the Energy Department.

In Waynesboro, Georgia, a $6.5 billion loan will help start construction on advanced nuclear reactors at Plant Vogtle, powering “1.5 million homes while preventing 10 million tons of carbon pollution annually.” Projects like these will satisfy the supply side of the energy equation. But what about the demand side?

Residential energy efficiency, energy costs focus of new laws

Senators Shaheen (D-NH) and Portman (R-OH) reintroduced their Energy Savings and Industrial Competitiveness Act on Thursday. The bill focuses on enhancing energy efficiency in residential, commercial, and federal buildings. Senator Shaheen told New Hampshire Public Radio that “energy efficiency is the cheapest, fastest way to deal with our energy needs.” She’s right.

On the home front, Shaheen-Portman provides for expanding proven programs like weatherization of existing homes, and a new amendment would pay for the SAVE Act. This bill would require federal mortgage underwriters to account for a home’s projected energy costs when calculating mortgage affordability. This simple rule change would finally tell homeowners the true cost of home ownership, the PITE Payment: Principal, Interest, Taxes, and Energy. Why are energy costs so important to home ownership?

Utility bills are usually larger than either real estate taxes or homeowners insurance, but they are currently ignored in mortgage underwriting.

We agree with the Institute for Market Transformation’s assessment of the SAVE Act, and we support both Shaheen-Portman and the SAVE Act. Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy together will help grow the home energy efficiency market, and they will help us make our homes more affordable, more comfortable, and more energy efficient. And that’s an “All of the Above” home energy policy we can all agree with.




All of the Above: US Energy Policy in Action

Last month we reported on President Obama’s “All of the Above” energy policy following his State of the Union speech. Especially important for the home performance industry are the parts of All of the Above that apply to residential energy efficiency. Performing home energy audits, and undertaking weatherization, air sealing, and HVAC retrofit and upgrade work can be part of everyone’s personal energy policy.

Secretary of Energy Dr. Ernest Moniz wrote a letter to BreakingEnergy.com explaining why and how “All-of-the-Above is Making a Difference Across America.” Dr. Moniz focused on generation in his letter, noting that California’s Ivanpah solar thermal plant will power 100,000 homes thanks to a successful public-private partnership and a loan from the Energy Department.

In Waynesboro, Georgia, a $6.5 billion loan will help start construction on advanced nuclear reactors at Plant Vogtle, powering “1.5 million homes while preventing 10 million tons of carbon pollution annually.” Projects like these will satisfy the supply side of the energy equation. But what about the demand side?

Senators Shaheen (D-NH) and Portman (R-OH) reintroduced their Energy Savings and Industrial Competitiveness Act on Thursday. The bill focuses on enhancing energy efficiency in residential, commercial, and federal buildings. Senator Shaheen told New Hampshire Public Radio that “energy efficiency is the cheapest, fastest way to deal with our energy needs.” She’s right.

On the home front, Shaheen-Portman provides for expanding proven programs like weatherization of existing homes, and a new amendment would pay for the SAVE Act. This bill would require federal mortgage underwriters to account for a home’s projected energy costs when calculating mortgage affordability. This simple rule change would finally tell homeowners the true cost of home ownership, the PITE Payment: Principal, Interest, Taxes, and Energy. Why are energy costs so important to home ownership?

Utility bills are usually larger than either real estate taxes or homeowners insurance, but they are currently ignored in mortgage underwriting.

We agree with the Institute for Market Transformation’s assessment of the SAVE Act, and we support both Shaheen-Portman and the SAVE Act. Shaheen-Portman, the SAVE Act, and President Obama’s All of the Above Energy Policy together will help grow the home energy efficiency market, and they will help us make our homes more affordable, more comfortable, and more energy efficient. And that’s an “All of the Above” home energy policy we can all agree with.