Many communities have taken advantage of demand response programs, earning financial incentives for curtailing their electricity usage during periods of peak regional power demand.

Whether enrolled through a competitive energy supplier or a utility, communities should be aware of some changes the Forward Capacity Market will bring to the program.

Developed by ISO New England, operator of the New England power system and wholesale electricity markets, along with the six New England states and industry stakeholders, the Forward Capacity Market’s objective is to ensure grid reliability and promote investment in energy efficiency, load management, distributed generation, and power plants.

The Forward Capacity Market allows the New England ISO to project the needs of the power system three years in advance. The ISO then holds a yearly auction to purchase enough power system resources to satisfy future regional requirements.

Beginning on June 1, 2010, the FCM will alter the New England demand response program in some ways. The changes are primarily in the logistics of the program: event times, response times and payment types.

Notably, the program will no longer limit the amount of curtailment events called per year. Based on ISO-NE’s analysis, events could be called at a much higher rate, but may not require all program participants to curtail demand during each event. There will no longer be specified call hours for events and events can take place on any day of the week.

Program participants will be required to respond to an event within 30 minutes of the event call. The demand response program in the FCM will provide monthly capacity payments only and will no longer provide energy payments for curtailment events.

Participating in a demand response program may still offer significant financial benefits and environmental advantages for communities. The payments earned by demand response participation could be lucrative, contributing to energy efficiency investments that will reduce overall energy costs for the long term.

Constellation NewEnergy is the endorsed supplier to the MMA’s MunEnergy program. For more information, contact MunEnergy Program Manager Emily Neill at (617) 772-7513 or