Demand Response: Earn Incentives While Reducing Strain on the Power Grid

As summer approaches, the looming threat of heat waves returns to the LA area. Heat waves can place additional strain on our electrical grid and energy supply as customers’ air conditioners work hard to keep buildings cool while equipment and machinery at businesses and commercial facilities continue working as hard as ever. But through our Demand Response (DR) program, commercial customers have the opportunity to earn incentives for reducing their electrical load during times of peak demand—and in doing so, conserve energy and ensure continued power reliability for all of Los Angeles.

How Does DR Work?

Available for Commercial and Industrial (C&I) customers, our DR program is a voluntary load-reduction program that enables customers to save on their utility bills and decrease energy use during periods of peak power demand. When energy demand gets too high, such as during a major heat wave, a DR event is signaled. These events take place between 1 p.m. and 6 p.m., and participants receive a notification either a day ahead or two hours in advance of an event. At the start of the event, participants implement temporary, pre-determined adjustments to manage their energy, thereby reducing usage and helping ease stress on the power grid. In exchange, LADWP provides those participants with financial incentives based on their energy savings.

What’s in It for My Business?

The more demand a business sheds during a DR event, the more financial incentives are earned. Incentives are two-fold: $0.25/kWh for reduced energy and $8/kW to $12/kW for curtailed load depending on the chosen notification option: 24-hour versus 2-hour advance notification type. Incentives can amount to a substantial sum, depending on the curtailed demand and operational flexibility.

Participating in the DR program comes with a host of other benefits and demonstrates an organization’s commitment to energy efficiency and sustainability, while increasing energy reliability. The environmental benefits include reductions in greenhouse gases and a business’s carbon footprint. The additional benefits include:

• Saving money on utility bills
• Decreasing operating costs
• Elevating control over electricity use
• Optimizing energy management systems’ capabilities
• Earning points for LEED certification

Is My Business Eligible to Participate?

The DR season starts on June 15. Applications are accepted throughout the DR season, but participants who submit by June 1 will maximize the program’s benefits. C&I customers are eligible to participate if they meet the following criteria:

• Have the ability to reduce at least 100 kW of load
• Can adjust energy usage during DR events, between 1 p.m. and 6 p.m.
• Can participate with day-ahead or two-hour advance notification

If you think Demand Response might be a good fit for your business, visit ladwp.com/DRProgram or contact your account advisor for more details.