Benefits of Demand Response in Electricity Markets and Recommendations for Achieving Them - A Report to the United States Congress Pursant to Section 1252 of the Energy Policy Act of 2005

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Sections 1252(e) and (f) of EPACT state that it is the policy of the United States to encourage "time-based pricing and other forms of demand response, whereby electricity customers are provided with electricity price signals and the ability to benefit by responding to them." It further states that "deployment of such technology and devices that enable electricity customers to participate in such pricing and demand response systems shall be facilitated, and unnecessary barriers to demand response participation in energy, capacity and ancillary services markets shall be eliminated". To help implement this new policy on demand response, the Act creates new requirements for electric utilities and states with respect to demand response. States are charged with conducting investigations to determine how those new provisions could be applied and whether to adopt widespread time-based pricing and advanced metering for utility retail customers. EPACT directs DOE to encourage demand response by:

  • educating consumers on the availability, advantages, and benefits of advanced metering and communications technologies, including the funding of demonstration or pilot projects, and
  • working with States, utilities, other energy providers, and advanced metering and communications experts to identify and address barriers to the adoption of demand response programs (EPACT, Sec. 1252(d)).

The law also requires DOE to provide a report to Congress, not later than 180 days after its enactment, which "identifies and quantifies the national benefits of demand response and makes a recommendation on achieving specific levels of such benefits by January 1, 2007" (EPACT, Sec. 1252(d)). This report fulfills that requirement.

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