Demand response green with income

Demand response - what is it? Demand response is the term used for a coordinated effort between electric providers and their customers to reduce electric consumption during periods of critically high levels of demand - which could otherwise result in a blackout. These "demand responders" are a select group of customers who have been prequalified to partner with their electric providers with a common goal of avoiding blackouts. How do demand response programs work? When electric demand reaches critical levels on the grid, one of the actions that a provider can take is demand response. This option involves notifying network responders to implement their individual action plans. Because providers can predict periods of high demand, notifications can be sent out in advance. Advance notice can range anywhere from 21 hours to as little as 2 hours before implementation. These steps might include reduced lighting, taking elevators off-line or increasing temperature set points for cooling systems. Additionally, facilities with back-up or emergency generators might also switch from the grid to in-house power. How does green fit into the picture? Because demand response is targeted to reduce consumption at times of peak demand, providers can avoid constructing additional generating capacity to meet these periods of critically high demand. The environment - green - benefits because lower levels of generating capacity equates to lower levels of emissions. Customers also benefit because their utility bills are lower. Customers are not paying for generating capacity standing idle - waiting on standby for periods of critically high demand. And where does the income part fit in? Income comes into play as compensation to demand responders for their commitment to reduce their electrical consumption upon notification. Actual payment amounts vary and are determined at the time the responder enters the program based on the amount of usage reduction that can be achieved. Can I qualify? Buildings and other large customers with in-house generating capacity are prime candidates for this program. Their costs of installing and maintaining emergency or stand-by generators can be offset by these demand response payments. Annual payments can range from $10,000 for reductions of 100 KW to over $100,000 for reductions of 1 MW or more. Customers, without in-house generating capacity, who are able to reduce consumption, can also join these programs. Contact your provider to discuss your potential for qualifying for demand response and green income. George Crawford is a principal at NYG Green Partners, New York, N.Y.