As energy costs continue to rise and grid reliability faces increasing pressure from extreme weather, electrification, and aging infrastructure, businesses across the PJM region are looking for smarter ways to manage risk and control costs. PJM Demand Response (DR) offers a compelling solution — one that allows organizations to generate meaningful revenue while actively supporting a more reliable and resilient power grid.
For many commercial and industrial facilities, Demand Response is no longer just an incentive program. It’s a strategic advantage.
What Is PJM Demand Response?
PJM Interconnection operates the largest wholesale electricity market and power grid in North America, serving more than 65 million people across 13 states and the District of Columbia. To maintain grid stability during periods of peak demand or system stress, PJM relies on Demand Response resources — customers who agree to temporarily reduce or shift electricity usage when called upon.
When a Demand Response event is triggered, participating facilities curtail pre-committed load for a short period of time. In exchange, they receive capacity payments for being available, and in some cases, additional energy payments for actual performance during dispatched events.
At its core, Demand Response helps prevent blackouts, reduces the need to run expensive and carbon-intensive peaking power plants, and ensures the grid can reliably meet demand during critical moments such as heat waves, cold snaps, or unexpected generator outages.
Why Demand Response Matters Now
The timing for Demand Response participation has never been better. Capacity prices in PJM have surged to record highs — up to 450% higher than last year — creating unprecedented earning potential for participating businesses.
For commercial and industrial customers, capacity costs can represent 20–30% of total electricity expenses. Demand Response provides a way to offset these rising costs with predictable, non-operational revenue.
Beyond financial returns, DR aligns with broader corporate objectives:
- Sustainability goals: Reducing demand during peak periods lowers emissions and supports decarbonization without major capital investment.
- Operational resilience: Participation encourages energy awareness and contingency planning.
- Corporate responsibility: Supporting grid reliability demonstrates leadership during times of system stress.
Earning Potential: What’s at Stake?
Through PJM’s Emergency Load Response Program (ELRP), businesses can earn between $98,000 and $170,000 per MW-year simply for being available to curtail load during emergency conditions — even if no events are ultimately called.
Additional energy payments apply when curtailments are dispatched.
Example:
A facility with 2 MW of curtailable load could earn $200,000 to $340,000 annually, depending on location, performance, and market pricing. These payments are structured, predictable, and can play a meaningful role in offsetting rising energy and capacity costs.
How PJM Demand Response Works
- Program Period: June 1 – May 31
- Event Notification: Typically, 30 minutes to 2 hours in advance
- Event Duration: Generally, 2 – 4 hours
- Participation: Voluntary during events, but commitments are firm once enrolled
- Program Management: Most businesses enroll through a Curtailment Service Provider (CSP)
A CSP such as Rodan Energy manages the complexity of Demand Response participation, including strategy development, enrollment, compliance, testing, event notifications, meter data management, and settlement.
Rodan Energy works closely with facilities to design curtailment strategies that minimize operational disruption while ensuring full program compliance — making participation seamless and low-risk.
Benefits Beyond Revenue
While the financial upside is significant, Demand Response delivers value well beyond the balance sheet:
- Grid Reliability: Your facility plays a direct role in preventing outages and maintaining system stability.
- Cost Control: Reduce exposure to volatile peak energy prices and rising capacity charges.
- Sustainability Impact: Lower emissions by avoiding the need for peaking power plants during high-demand periods.
- Operational Flexibility: Many participants rely on existing equipment, controls, or operational adjustments – —no major infrastructure upgrades required.
Is Your Facility a Good Fit?
Demand Response is well-suited for organizations with flexible or controllable load, including:
- Manufacturing and industrial facilities
- Data centers
- Large commercial buildings
- Operations with on-site generation or energy storage
Even smaller facilities can participate through aggregation, with eligibility starting at just 100kW of curtailable load. If your operations include processes that can be shifted, paused, or reduced temporarily without impacting safety or production, your facility likely qualifies.
Turning Grid Challenges Into Opportunity
PJM Demand Response transforms grid challenges into business opportunity. With record-high capacity prices, growing grid stress, and increasing pressure to manage energy costs and emissions, there has never been a better time to explore participation.
With the right partner and strategy, Demand Response can deliver predictable revenue, enhance resilience, and position your organization as a leader in grid reliability and sustainability.
Interested in learning how much your facility could earn? Rodan Energy can help assess your eligibility and design a Demand Response strategy tailored to your operations. Contact us today for more information.
