Demand response, or DR, programs have long been a key tool in peak load management and can play a vital role in ensuring a resilient grid amid mounting load growth. These programs can also be an effective means to cost savings for utilities and customers alike.
Demand response is when consumers adjust electricity usage in response to signals from their utility. These signals can be delivered to residential, commercial, and industrial customers through price changes, financial incentives, or requests to reduce consumption during peak periods.
For utilities, DR nets savings by reducing costs associated with peak load and can allow them to defer investments in costly new infrastructure. While DR nets long-term benefits, utilities have to make initial investments in technologies such as advanced metering infrastructure and control systems to enable DR programs.
Data show that public power both is and isn’t making the most of DR. In 2024, the Energy Information Administration showed that approximately 1.2 million of the nearly 11 million customers signed up for utility DR programs were public power utility customers, or just over 10%, even though public power customers comprise 15% of the market. However, of the 409,403 megawatt-hours total energy savings from DR programs across the U.S., 130,028 MWh, or 32%, were from public power utility programs. Still, the potential peak demand savings — meaning the total amount of capacity which could be saved if all customers who signed up for DR programs were able to curtail energy usage when called upon — was over 31 gigawatts, with actual peak demand reduction totaling 12 GW, or 1.6 GW for public power utilities.
Public power DR programs continue to grow not just in size and reach, but also in variety.
Hingham Municipal Lighting Plant in Massachusetts realized $70,000 in net avoided transmission and capacity costs within one year of joining the Massachusetts Municipal Wholesale Electric Company’s Connected Homes program. The program allows participating utility customers to enroll smart devices; the utility can then automatically shift those devices’ energy consumption away from peak demand periods.
Encouraging customers to participate might involve offering incentives for signing up or actually participating.
In Michigan, residential customer participants in Lansing Board of Water & Light’s Peak Power Partner DR program receive a $50 check for enrolling and $25 at the end of the year if they opt into at least 50% of called events.
Austin Energy in Texas has a long-term strategy to achieve 270 MW of DR by 2035. The public power utility provides both a price-signal option and a control option for its commercial customers. Businesses enrolled in its standard DR program earn bill credits based on each kilowatt saved when called to reduce usage during peak periods. Business customers that have implemented automated DR can opt into Fast DR, where they do not have to take any measures to reduce consumption after receiving a notification, as it is done automatically. Fast DR enrollees receive bill credits $10–$15 higher per kW compared to standard DR, and Austin Energy offers additional incentives for participants’ first year. Austin Energy’s website noted an example of how a customer saved tens of thousands of dollars on energy bills under each program. As of July 2025, Austin Energy had 195 buildings enrolled in its program.
With electrification and data center load growth, utilities are working with tech companies and automakers to design more effective DR programs.
In California, the Sacramento Municipal Utility District’s managed charging pilot for residential customers who own or lease qualified electric vehicles aims to reduce peak load by scheduling participants’ EV charging to lower demand hours. SMUD worked with vehicle manufacturers to ensure the program aligned with existing vehicle applications and technology for managing charging, and to ensure participants can override the schedule in case of immediate need.
After seeing how it could successfully shift usage at a data center within Omaha Public Power District’s service area, Google signed an agreement with Tennessee Valley Authority that shifts non-urgent, energy-intensive machine-learning processes, such as processing YouTube videos, to lower-demand hours.
All these programs require customer awareness and education to help achieve load management and cost savings. HMLP, for example, used MMWEC’s marketing toolkit for the Connected Homes program to engage customers and increase participation.
Brianna Bennett, who manages customer programs and rebates at HMLP, explained, “Our approach was simple: Market consistently, listen closely, and fill the gaps. Each time we addressed customer concerns and adapted, we earned more buy-in.”
