Effective demand response can help reduce electric price volatility, mitigate generation market power, and enhance reliability.

In 2008, the Commission issued Order No. 719, which made several reforms to further eliminate barriers to demand response participation in organized energy markets. These reforms sought to to ensure that demand response is treated comparably to other resources.  In 2011, the Commission addressed compensation for demand response participation in Order No. 745.  In that order, the Commission required each RTO and ISO to pay a demand response resource the market price for energy (locational marginal price or LMP) when the demand response resource can balance supply and demand as an alternative to a generation resource and dispatch of the demand response resource is cost-effective.  In 2016, the Supreme Court upheld Order No. 745 in FERC v. Electric Power Supply Association.

The Energy Independence and Security Act of 2007 required the Commission to perform a national assessment of demand response potential and to develop a national action plan on demand response National Assessment & Action Plan on Demand Response.

Section 1252(e)(3) of the Energy Policy Act of 2005 (EPAct 2005) required the FERC to prepare a report that assesses electric demand response resources, and the saturation and penetration rate of advanced meters Reports on Demand Response and Advanced Metering.


Energy Efficiency

This page was last updated on February 14, 2023