FERC Report Finds Significant Potential to Reduce Power Demand

On June 18, the Federal Electricity Regulatory Commission (FERC) released a report estimating the possible reduction in peak-hour electricity use that could be achieved with demand response policies. A National Assessment of Demand Response Potential found that using price signals and other incentives could decrease peak hour electricity use by as much as 188 GW by 2019, or up to 20 percent of national peak demand. Reducing consumption by this amount would eliminate the need for hundreds of new power plants over the next decade and significantly reduce greenhouse gas emissions. The report also highlights 25 regulatory, technical, and policy barriers to demand response, and includes state-by-state breakdowns of potential capacity reduction under four policy scenarios.

“This study takes a flexible, real-world approach to gathering information on the potential for demand response,” said FERC Chairman Jon Wellinghoff. “It also makes available to the public an easy-to-use spreadsheet model, complete with data inputs and assumptions, so that states, utilities and other interested parties can make updates or modifications based on their own data and policy priorities.” The report recommends a number of policy actions , including increasing efforts to educate consumers about demand response measures, developing methods to coordinate demand response efforts at the wholesale and retail levels, and ensuring the effective sharing program of information with utilities and regulators.