Utility, Demand Response

White Paper
Navigant: Utility Demand Response Programs

An Often-Overlooked Opportunity in Customer Experience

Utility customers have little choice in their power providers, particularly in vertically integrated energy markets. Accordingly, utilities acquire their customers less because of winning customer service, service offerings, or more general forces of competition, and more due to an inelastic demand for energy. Despite a relationship often born out of necessity, the utility still has the duty and the interest to provide reliable, affordable energy and excellent customer service to its customer base.

Demand-side management (DSM) is often overlooked as a mechanism to strengthen utility relationships with commercial and industrial (C&I) customers, yet it often aligns customer preferences for incentives and low energy costs with utilities’ desire to reduce peak demand and power generation costs. This white paper explores the mechanisms by which utilities can implement or improve upon existing DSM programs, with particular focus on the nuances of implementing demand response (DR).

This white paper highlights critical insights for utilities into the implementation of future customer-focused DR programs, given the rapidly changing and distributed energy grid. Utilities with existing DR programs that are either underperforming or otherwise failing to yield desired results may look to the considerations and case studies to strengthen their existing DR portfolio and meet customer needs.

DSM programs are not only overlooked by utilities, but also by utility C&I customers who seek to lower their electricity costs. Despite proactive action on the part of many C&I customers, there is still a profound absence of knowledge about value creation opportunities through participation in one or more DR programs. This white paper is also geared at C&I customers who would like to learn about different types of DR programs and how to maximize benefits through enrollment.

By Brett Feldman
Research Director, Navigant

William Tokash
Senior Research Analyst, Navigant

Jessie Mehrhoff
Research Analyst, Navigant