March 01, 2019 Articles

Extending Demand Response to the Natural Gas Industry

Demand response programs promote better pricing signals to consumers of the resource costs of energy consumption.

By Laura T. W. Olive

Demand response programs, which have become commonplace in retail electricity markets, promote better pricing signals to consumers of the resource costs of energy consumption. These price signals encourage consumers to change consumption behavior during peak usage time periods, when costs are highest.

Though demand response has been widely applied in electricity markets, interest in promoting demand response programs for natural gas recently gained national attention with a bill sponsored by Senator Sheldon Whitehouse (D-RI) to β€œestablish a natural gas demand response pilot program to use the latest demand response technology from the energy sector for natural gas.” Energy Infrastructure Demand Response Act of 2018, S. 2649, 115th Congress (introduced Apr. 11, 2018). A study currently underway at the Department of Energy (DOE) will address β€œthe costs and benefits associated with those savings, including avoided energy costs, reduced market price volatility, improved electric and gas system reliability, deferred or avoided pipeline or utility capital investment, and air emissions reductions.” Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, H.R. 5895, 115th Congress (Sept. 21, 2018).

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