The reduction goal, which applies to residential customers who have authorized their utility to reduce their usage during peak hours, is 20 percent.
________________________________________________
The state has fallen far short for meeting its demand response goal for residential customers, according to a new report from the Electric Reliability Council of Texas.
The reduction goal, which applies to residential customers who have authorized their utility to reduce their usage during peak hours, is 20 percent. However, the average reduction during an 11-month study period in 2025 was just 2.5 percent, according to an ERCOT report presented to the PUC this month. You can read the report here.
Demand Response programs are meant to reduce energy costs for consumers by allowing them to reduce usage when wholesale power prices are high. Historically, however, it has been only large business customers inside ERCOT that have availed themselves of demand reduction strategies.
But in 2024, in response to the passage of Senate Bill 1699 from two years earlier, the PUC set the 20 percent residential goal. It also created demand response reporting guidelines for retail electric providers and charged the ERCOT grid operator with tracking progress.
UNDERWHELMING RESULTS
And the results, so far, have been underwhelming. PUC energy efficiency director Ramya Ramaswamy, in comments to the agency’s commissioners on July 9, cited various reasons for why. Among them: the relatively short study period, the novelty of such programs, and a drop in wholesale market prices in 2025 that diminished demand response incentives.
ERCOT also says it requires at least 1,000 unique service locations deployed during a given hour to obtain enough data to accurately measure results. However, only 34 days during the 11-month study period met the minimum participation threshold, according to ERCOT.
But there is good news. According to PUC economist Chris Brown, participation and megawatt reduction began growing toward the end of the study period. When the study period began during the winter, there were on average 3,759 home or electric meters deployed, he said. By fall, that number exceeded 25,600.
“We’re still not meeting the goal at a seasonal level, but it is improving over time,” Brown said.
Ramaswamy said ERCOT will continue gathering data “to ensure that demand response programs are designed and deployed in a manner that maximizes grid efficiency and economic efficiency.”
More information about the residential demand response program can be found in PUC Docket 56966.