Part 7: Top 3 Questions About Demand Response With Answers


Top 3 Questions About Demand Response With Answers


Demand response is a big discussion today and perhaps will be for the long-term. After all, the whole country is driving frantically towards efficient and sustainable energy. DR is no longer just a technical topic. It’s a household byword, or certainly becoming one.


In this article, we answer the Top 3 questions people ask about DR according to Google.  We want to paint a picture in practical terms for every layman who has a stake in this initiative. That essentially means everyone, one way or another. 


Which of these questions have you, yourself, asked about DR?


1. What is Demand Response?


It always starts with the basics. What is it anyway?


Paraphrasing FERC’s definition, DR is the change in consumer’s usage of electricity patterns. More specifically, DR programs are set in place so that people will change their consumption patterns from how we have always used electricity towards consumption that creates less wastage and lower generation costs. To facilitate nationwide scale, DR programs are regulated by the federal and state/local governments and implemented by state and investor-owned utilities. 


Financial incentives like discounts and rebates are integral to the program design. Policy makers and implementors found that when these benefits are at stake, people are more likely to use electricity when it is most efficient - in terms of costs and utility capacity to meet demands, rather than when it is most convenient, which is our natural preference.


2. What is Demand Response Management?


Also, how is DRM related to Smart Grids?


Utilities use new and existing systems to manage DR programs. These technologies become part of the smart grid so that all the results from different systems form a comprehensive solution for all of a consumer’s energy needs. 


An example of DRMS is Meter Data Management System, which is now a common grid component. MDMS is a major component of many DR programs. It manages information relay and processing so consumers, utilities, and third-party providers can make the most beneficial decisions for their area’s energy market.


MDMS works side-by-side other management systems like Customer Portal and Information systems. DR Management structures generally involve multiple protocols in multiple devices within multiple networks. This is an advantage, if not a necessity since any energy management technology needs to be compatible with the smart grid if it should work for the long term.


3. What Are the Types of DR Programs?


Time-based programs use different price schedules based on actual consumption zones - peak, shoulder, and off-peak hours. 


Consumers get significant control over how they schedule their load while also allowing utilities to create relatively simpler costing and billing systems.


  • Critical Peak Pricing. Rates during peak hours, emergency, and critical periods are kept higher either through predetermined price schedules or flexible pricing.
  • Peak-time Rebate. Consumers get rebates to the regular rate when they voluntarily reduce their consumption during peak hours. 
  • Time-of-use Pricing. Rates are set differently per hour depending on the historical grid usage for the period. 
  • Real-time Pricing. Rates are also different per hour but prices are based on actual costs for generation of transmission of electricity for that hour. 
  • System Peak Response Transmission Tariff. The program takes the opposite route by placing additional charges for peak-hour transmission to discourage excessive usage on peak periods.


Incentive-based programs offer even greater freedom for consumers as to when and how they use electricity, as well as how much wattage they consume. This helps create long-term stability for the grid by encouraging consumers to use auxiliary resources to lift the demand on the grid.


  • Direct Load Control. Utilities use remotely controlled devices to communicate with users when it is necessary or ideal to shave consumption in exchange for financial benefits.
  • Interruptible Load. Companies and households are given financial incentives to use their existing standby power generators for their consumption when there is a risk of a power supply shortage. 
  • Spinning Reserve. The strategy employs generators already working in sync with the grid to provide immediate response and stabilize the system
  • Non-spinning Reserve. Non-spinning reserve uses energy resources that are not connected to the grid but could be brought online quickly.
  • Emergency Demand Response. This can either be an energy-only program or a full emergency program in exchange for additional CSP capacity credits.
  • Demand bidding and buy-back. The program targets large consumers to change their energy consumption pattern and decline their peak load in return for financial rewards. 


DR Is The Future of Energy


Or at least, a big part of it.


Many utilities are still transitioning towards effective DR management systems. Many consumers are also still on the fence about participating in their utility’s DR initiative. It is clear, though, that DR will help stabilize the country’s energy grids as we move towards more cost-effective and environmentally-responsible power options. 


It does not matter if you are an electrical industry professional, a businessman, or a simple energy consumer. Get familiar with demand response. Learn more about the technical side of DR from our Blog Series on DR and maximize program benefits for your consumption or operation. 

Walters Wholesale Lighting and Controls Division, is a leader in the Demand Response arena, contact your local Walters branch to see if we can help set your next project in motion.

Sirikit Hiyasmin Loong-Elebaran is a Filipino Freelance Writer who has 9 years of technical niche experience. She mainly provides content for electrical and IT companies. She is also the CEO and Founder of and . You can reach her at


Tags:  electricity; demand resposne; electric; natural gas; technology; answers
  1. Registration

    Click here to login or register your account. Business account customers will have access to account pricing and payment options.

  2. Help Center

    Click here for answers to common questions about ordering, shipping, payment, and returns, as well as contact information for our customer service team.

  3. Branch Locator

    Updating your home branch will make scheduling pick up orders faster and easier and will improve search results by bringing local products to the top of the list.

  4. Search

    Search using keywords, manufacturer part numbers, SKUs, trade slang, and more…

  5. Shop by Category

    Browse our catalog of thousands of products…

  6. Newsletter

    Sign up here to receive our latest deals and to be notified as we continue to improve the site.