Since its inception, the Office of Electricity Delivery and Energy Reliability (OE) has been committed to modernizing the nation's electricity delivery infrastructure to assure consumers a robust, reliable electric power system that meets their increasing demand for energy. OE's mission includes promoting sound public policies and assisting states and regions in developing innovative programs that decrease demand on existing energy infrastructure. Successful, cost-effective demand response programs can achieve that goal and OE has been at the forefront of assisting states and regions to develop guidelines for demand response programs.

Demand response allows retail customers to participate in electricity markets by giving them the ability to respond to prices as they change over time - either daily or hourly in most instances. Methods of engaging customers in demand response efforts include offering a retail electricity rate that reflects the time-varying nature of electricity costs or programs that provide incentives to reduce load at critical times.

Section 1252(d) of the Energy Policy Act of 2005 required DOE to issue a report on the benefits of demand response in electricity markets and to recommend actions for achieving successful demand response programs, which OE published in February 2006, entitled Benefits of Demand Response in Electricity Markets and Recommendations for Achieving Them (PDF 688 KB). In this report, OE recommends a series of public policy actions for consideration by state, regional and Federal agencies, electric utilities, and consumers to deploy successful demand response pricing mechanisms and programs. OE developed these recommendations following a robust public input process in which interested parties provided suggestions for actions to encourage demand response in different wholesale and retail market structures.

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