FAQ: Demand Response Programs
While all agriculture service points will be subject to either the Peak Day Pricing (PG&E) or Critical Peak Pricing (SCE) programs, there are two exceptions:
- If you have enrolled in a Demand Response program like Peak Energy Agriculture Rewards (PEAR) Incentive Program.
You can "opt out" of either program for 1 year; however, you must notify your utility representative at least two business days prior to your scheduled enrollment date.
- Once interval or Smart Meters have been installed and you become eligible for either program—you will be given a grace period to opt out of the program—however, you must notify your utility representative at least two business days prior to your scheduled enrollment date.
Demand Response programs are incentive programs offered by utilities to electricity users. In exchange for volunteering to reduce electricity use during short-term “peak demand events” (when high electricity demand could outpace supply), electricity users earn cash incentives. They sometimes also receive free equipment that helps them respond to a utility’s request to reduce electricity use.
While Demand Response programs are offered to all sorts of customers in many different industries, some Demand Response programs—like the Peak Energy Agriculture Rewards (PEAR) program—specialize in serving agriculture producers.
Electric utilities determine who can participate in their Demand Response programs. In some regions, only heavy users of electricity are asked to participate. In other areas, more widespread Demand Response programs may be offered. For California agriculture producers, the Peak Energy Agriculture Rewards (PEAR) program is a Demand Response program being offered to PG&E and Southern Cal Edison electricity customers who have electrical loads over 75 horsepower and the ability to reduce or shut down loads during peak demand events.
Turns out, it's actually cheaper and easier to incent some consumers to NOT use electricity when overall demand is very high than it is to build new power plants, transmission lines, substations and other expensive infrastructure.
Demand Response programs are offered in many states across the US, as well as in countries around the globe. California has been highly proactive in offering Demand Response programs. For agriculture users, California’s Central Valley is an ideal location for Demand Response programs due to the collision of energy, water and ag-related issues.
It depends on the utility offering the Demand Response program and the industries being asked to participate. For agriculture electricity users in California, the Demand Response season typically runs May through October. It’s best to enroll as early in the year as possible, as the enrollment and equipment installation process takes about 120 days. If you enroll after the Demand Response season, you will not see cash incentives until the following year.