demand response programs (U-15277)

On June 12, 2007, the Michigan Public Service Commission issued an Order in Case No. U-15277 directing the MPSC staff to begin and manage a collaborative proceeding for a demand response pilot program.

Demand response programs are customer-driven efforts that reduce electric consumption in response to price signals, incentives, or information from electric grid operators. The programs are intended to reduce electric demand during periods of high wholesale prices, providing an alternative to building new generation capacity. These programs enable customers to save on energy costs by shifting their consumption patterns to less expensive times of the day. Although utilities in Michigan currently provide demand response programs, customer participation is low, and new technology is available to improve the program's performance.

In its order, the Commission directed the collaborative process to include pilot programs that emphasize the use of "smart" metering, advanced technology, and time-based or real time rate structures, in particular assessing the impact of time-based rates on customer demand for electricity. Customers would be allowed to participate in these programs on a voluntary basis. Staff report is due at the end of the first year.