{{ content.title }}

Important note: This blog was updated in October 2024 to reflect the outcomes of the 2025/2026 PJM Base Residual Auction

Say “demand response” or “DR” anywhere in the mid-Atlantic region and most folks will think of PJM’s Emergency Load Response Program (ELRP). That’s not surprising – it’s the largest DR program in the world, and a lucrative one at that. Each year, the program pays participants hundreds of millions for their willingness to help ensure grid stability – see PJM’s Monthly Activity Reports for how much they’d paid out on year-by-year basis. And coming into the 2025/2026 delivery year, participants can earn record levels of revenue.

 However, while ELRP carries the lion’s share of capacity and revenue, PJM is no one-trick pony when it comes to maintaining grid stability and working to keep electricity prices low. There is a wide spectrum of demand response programs available from PJM and local utilities that each serve different grid needs, and some can be layered (i.e., you can participate in multiple programs at the same time).

 It can be challenging to figure out which program – or programs – are worth your effort. With the largest portfolio in PJM, Enel is uniquely positioned to help you navigate and maximize your DR participation in one of more of these programs, always balancing effort required with reward potential. Let’s review opportunities where you can earn revenue while helping to keep the mid-Atlantic grid reliable:

PJM Emergency Load Response Program (ELRP)

• What’s it for: Preventing blackouts when electricity demand outstrips available supply, such as during severe weather spikes.

• You’re a good candidate if: Your site can reduce at least 100 kW with 30 minutes to 2 hours notice. ELRP attracts a wide variety of facilities, including manufacturing sites, hospitals, cold storage, retail, and universities, to name a few.

• How you participate: When notified of an impending grid emergency, reduce your demand by either curtailing use, switching to on-site generation, or a combination of the two.

• Your earnings potential: Earnings are based on the load you can curtail in an emergency, but you are paid even if there are no emergencies called. The price for reducing 1 MW of demand is nearly $100,000 annually (the most current numbers provided by the 2025/2026 auction results), depending on the zone – some zones are even higher.   

PJM Synchronized Reserve Market

• What’s it for: Restoring grid stability during sudden system disruptions that last, on average, 9 minutes. 

• You’re a good candidate if: Your site has energy-intensive load (at least 500 kW) running more than 12 hours per day (e.g. melters, pumps, cold storage, and wood-product processing). Your site’s load is stable and predictable and can be fully reduced within 10 minutes, either by curtailing or switching to permitted back-up generation. 

• How you participate: You bid into the market, choosing the schedule and price point for your availability. If your offer is accepted, you are on standby and available for dispatch, should grid instability occur.

• Earnings potential: Earnings depend on several factors, including your zone and number of hours you are on standby, and energy market conditions. A solid strategy balancing your schedule and bid commitments is critical to ensuring you see a good return. The price for reducing 1 MW of demand is $20,000 to $30,000 annually (the most current numbers as of 2024).

Indiana Michigan Power Demand Response Service Program 

• What’s it for: Preventing blackouts when electricity demand outstrips available supply, such as during severe weather spikes.

• You’re a good candidate if: You are an AEP Indiana Michigan Power customer and your site can reduce at least 100 kW with 30 minutes to 2 hours notice. This program attracts a wide variety of facilities, including manufacturing sites, hospitals, cold storage, retail, and universities, to name a few.

• How you participate: When notified of an impending grid emergency, reduce your demand by either curtailing use, switching to on-site generation, or a combination of the two.

• Your earnings potential: Earnings are based on the load you can curtail in an emergency, but you are paid even if there are no emergencies called. The price for reducing 1 MW of demand is nearly $38,000 (the most current numbers as of 2024).

Tips to maximize value from PJM demand response programs

Fully capitalizing on these kinds of opportunities requires more than just evaluating the available programs. Based on your organization’s current capabilities, you could be in a good position to create or enhance value earned in other ways, including:

• Installing or upgrading a building management system: A building management system (BMS) makes it easier to participate in demand response, especially fast-response programs like the Synchronized Reserve Program. With a BMS, you can pre-program and automate your curtailment strategy, making participation effortless. Don’t have the CapEx? Enel’s FlexUp solution enables you to install/upgrade a BMS with zero out-of-pocket costs – Enel pays the upfront costs and you pay back the costs through your DR earnings.

• Upgrading your backup generator: In some cases, this can vastly increase your ability to participate in DR without affecting your normal day-to-day operations. While generator upgrade projects can be costly upfront, Enel can deduct the cost from your future DR earnings (similar to our FlexUp solution above). Yes, you’re reading correctly – a new/expanded revenue stream, $0 out-of-pocket costs.   

• Managing Peak Load Contribution (PLC) charges: While some organizations could see more cost savings by managing PLC charges than they would earn in DR, they need to be prepared to respond to more dispatches: 8 – 12 dispatches each year versus the 2 – 5 dispatches typical of ELRP. We’ve found that many businesses in PJM that try to manage their peak demand strategically one year tend to sacrifice DR revenue the following year as their baseline erodes. Determining which strategy, or what combination of the two, is best for your business requires thoughtful consideration of operational flexibility, savings/earnings opportunity, and DR program rules.

 How to get started in PJM demand response

You may be wondering which program(s) will drive the most benefit for your organization. The truth is that it just doesn’t make sense for every business to participate in every program. Understanding the available options – and how they apply to your organization – is the first step to unlocking the full value of demand response. Our teams are always on the lookout for ways customers can maximize revenue, and we bring these opportunities to customers who are likely to be a good fit. Contact our team today to get a conversation started around how your organization can capitalize on these opportunities.