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Load participation and demand response

Reliable grid operation is dependent on adequate supply and flexible resources. Load serving entities procure supply in advance to meet their demand. Demand response providers with the ability to aggregate customers capable of reducing their electric demand (load) can participate in the ISO day-ahead, real-time and ancillary services markets. Demand side resources can offer bids that reflect their flexibility to adjust their load in response to market schedules and dispatches.


Load Serving Entities

The ISO reliability requirements program requires that load-serving entities procure additional energy (reserve margin) above their demand, and is intended to compliment the state's resource adequacy programs.

Participation process and requirements

Participation in the ISO market requires a scheduling coordinator and ISO-certified revenue-quality meters. Bidding in ancillary services requires special certification and installation of direct telemetry. There are also different requirements for proxy demand resources and participating load.

Proxy demand resource

End-use customers can bid demand response services directly into the ISO wholesale day ahead and real time market through a demand response provider as proxy demand resources. The ISO uses a base-line energy calculation to determine the amount of energy curtailed.
Net benefit test requirement
All proxy demand resources must participate in the net benefit test that the ISO uses to set the monthly price threshold for cost effective demand response resource bids.  The test was established as an outcome of the Demand Response Net Benefits Test initiative in response to FERC order number 745.  The test will continue until a FERC rules otherwise.

Participating Load

Curtailable demand, including pumping load or aggregated participating load, can bid into the ISO market through a scheduling coordinator who also acts as the load serving entity for the underlying load. These participants can provide non-spinning reserve and provide demand reduction in the real time market.

Related stakeholder initiatives


Demand response net benefits test
Implementing a net benefits test that establishes a price threshold above which demand response resource bids are deemed cost effective per FERC Order No. 745.
Reliability demand response product
Developing a wholesale demand response product that enables compatibility with and integration of existing retail emergency-triggered demand response programs into the ISO operations and market.