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All About Energy

7 Questions and Answers About Demand Response in Texas

Incite Energy Mar 16, 2017 7:51:00 AM
Incite Energy
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Summer is on it's way, and with it increased demand for electricity across Texas as we start to run our air-conditioning units. This spike in demand puts a huge strain on the grid and can lead to blackouts. That's why ERCOT, the group responsible for regulating Texas's energy grid, started programs like demand response, in order to lower over all usage when demand is high.

While businesses that qualify for demand response have opportunities to enroll throughout the year, for those who want to participate this summer, there are only a few weeks left to enroll. So if you're considering DR, but still aren't sure, we've compiled a list of the most common DR questions.


What is demand response?

Demand response is an opportunity for energy consumers to lower or shift their energy use from peak times to off peak periods in order to improve grid stability and prevent blackouts. Grid operators offer financial incentives for consumer participation.

Demand Response programs allows you to realize savings through payment for load curtailment during periods of high demand that could negatively impact grid stability.


What is ERCOT’s Emergency Response Service (ERS) Program?

ERCOT’s Emergency Response Services program is a grid reliability wholesale demand response program that helps prevents power outages during times of peak use or emergencies in ERCOT service areas. Participants at specific load zones reduce energy consumption by a pledged amount to lower overall demand on the grid.

In February 2011, for instance, an ice storm caused ERCOT to loose 7,000 MW of power. The ERS DR program helped reduce demand by over 400 MW in response keeping the emergency from worsening.


How much can I earn from demand response?

How much you earn from demand response is based the number of hours you are enrolled to participate in and the clearing price for the amount bid. Businesses can earn approximately $75,000 for every 1 MW of load curtailment.

If enrolled in a Demand Response program, you would receive payment for the amount curtailed when an event is called, and if no event is called, you would still receive a pre-determined payment. ERCOT provides monetary compensation to Qualified Scheduling Entities within 70 days after the end of the performance period. If enrolled in a Demand Response program, you would receive payment for the amount curtailed when an event is called, and if no event is called, you would still receive a pre-determined payment.


What are the benefits of demand response?

By participating, you earn compensation, lower your carbon footprint, improve energy management, and protect the community by ensuring grid stability.

How do I qualify for ERCOT ERS DR Program?

To qualify for DR in ERCOT, you must meet the following requirements:

  • Have usage is over 100 kW
  • Be able to reduce energy usage within a 10 or 30 minute window
  • Have a smart meter or IDR meter installed


Click here to get your free Demand Response income projection now.


What DR programs can I participate in?

You can participate in either ERS-10 or ERS-30. ERS-10 gives you a 10-minute notification before event, during which time you must reduce your load by your pledged amount, while ERS-30 gives you a 30-minute notification.

Once ERCOT sends the notification to your qualified scheduling entity (QSE), your QSE then forwards the alert to you along with your load resource reduction requirements.

What are the ERCOT ERS DR program periods?

DR is available year-round. There are three 4-month periods in which you can bid you curtailable load into six time periods.


Program Periods

  • February – May
  • June – September
  • October – January


Business Hours - Monday to Friday

Group 1: 5 a.m. to 8 a.m.

Group 2: 8 a.m. to 1 p.m.

Group 3: 1 p.m. to 4 p.m.

Group 4: 4p.m. to 7 p.m.

Group 5: 7 p.m. to 10 p.m.

Group 6: All other hours


When are events called?

ERCOT tests all demand response participants with actual load curtailment one every 365 days, barring any actual event within that time frame. Since demand response’s implementation, there have only been 3 events:

Past Events

  • February 2011 – Ice Storm
  • August 2011 – Heat Wave
  • January 2014 – Polar Vortex


What if my facility is in a regulated area?

If your facilities are located in regulated service areas Commercial Load Management (CLM) is the demand response program regulated utilities in ERCOT offer as part of their Standard Offer Programs (SOP) for energy efficiency.

ERCOT offers CLM DR once a year in summer. There are two types of payment, one for the baseline test and one for the performance period. While payments vary by IOU, they are based on how much load participants curtail in kW multiplied by financial incentive rate ($/kW) from your baseline performance and for the actual curtailment events during the performance period.


Program Details

  • Dates: June 1 to August 30
  • Days: Monday to Friday, excluding holidays
  • Hours: 1:00pm CST to 7:00pm CST
  • Maximum Hours of Deployments: 17 hours total
  • Program notifications: 30 to 60 minutes, varies by IOU (instance of use)
  • Payouts: $25 to $40 per kW, varies by IOU
  • Test Duration: 1 to 2 hours, varies by IOU
  • Meter Requirement: IDR meter with 15-minute interval or smart meter


Past Events

  • Summer 2011
  • Summer 2012


For more information and resources on demand response in Texas, visit ERCOT's website at: http://www.ercot.com/services/programs/load


Start earning with demand response

If you would like to increase revenue with demand and streamline your energy management process, then send us an email right now.

We will create a custom Demand Response income projection for your business free of charge along with recommendations on strategy based on your goals.


Click here to get your free Demand Response income projection now!


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Topics: Demand Response