Demand and Demand Response

A charge for "demand" has long been a part of the bills sent to larger three-phase customers. The measurement of demand is conducted by means of a demand meter that records electrical consumption within a predefined period of time. Demand response provides an opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives. Demand response programs are being used by electric system planners and operators as resource options for balancing supply and demand. Such programs can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates. There are at least three forms of demand response programs that have emerged with various utilities. While the precise definitions may vary somewhat, these are called emergency demand response, economic demand response, and ancillary services demand response.