Demand response (DR) is moving from legacy or fringe utility programs to essential components of the utility and ISO resource mix—even competing head-to-head with generation in ISO markets. But many utilities still keep DR in a silo of the DSM program group where system planners and grid operators have little input to program design and little confidence in the value of securing or dispatching the DR resource.
This paper proposes the hypothesis that common practices at U.S. utilities in developing and utilizing DR programs are insufficient to ensure the continued expansion of DR resources that will be used by system planners to defer alternative capacity investments and by grid operators as a substitute for the dispatch of peaking units.
Citing anecdotes from a variety of utility programs, the author makes the case that most utilities are not fully realizing the potential value of their DR resources.