Demand Response Earnings in Ohio at 2026–2029 Prices

Ohio market insight · Capacity & grid

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

Capacity demand response in PJM is paid the same auction price as a power plant — now at the cap of about $119–$122 per kW-year through May 2029 — adjusted by PJM's accreditation rating for demand response (69% for 2026/27, 92% for 2027/28 and 91% for 2028/29). That puts the gross value of a reliably curtailable kW at roughly $108–$112 a year for 2027/28 and 2028/29. You receive a share of it through a curtailment service provider (CSP) under a private contract, and you take on real obligations: respond when called, year-round if you sign up for annual service, or pay penalties. Summer 2025 showed the risk — PJM reported demand response delivering only about two-thirds of its commitments.

This page is about the money. For how demand response programs work and who's eligible, see demand response explained; for lowering your capacity tag instead, see the PLC playbook; for the alerts that precede dispatch, see PJM alerts and what to do; and for why the grid needs it, see PJM's capacity shortfall.

Why demand response is worth more now

Delivery year	PJM price ($/MW-day)	≈ $ per kW-year	DR accreditation rating	≈ gross value per committed kW
2026/27	$329.17	$120.15	69%	$82.90
2027/28	$333.44	$121.71	92%	$111.97
2028/29	$325.00	$118.63	91%	$107.95

The accreditation rating (PJM's "ELCC class rating") reflects how much reliability PJM credits a demand-response megawatt with. Its jump from 69% to 92% for 2027/28 is a big part of why demand response cleared 7,299 MW in that auction, up from about 5,531 MW. About 7,017 MW cleared for 2028/29. Treat the last column as a simplified illustration; PJM's settlement adds loss factors and other adjustments.

How curtailment service providers pay you

Businesses can't sign up with PJM directly. A CSP — a specialist aggregator, a supplier or another company registered with PJM — enrolls your site, offers it into PJM's auctions, receives the capacity revenue and pays you. PJM states plainly that how that payment is split between the CSP and the customer "is a matter of private agreement." Contracts vary in:

Structure: a percentage of capacity revenue, a fixed $/kW-year, or a guaranteed minimum plus upside.
Energy payments for reductions during events, on top of capacity payments.
Penalty sharing: whether the CSP or you bear PJM's charges if the site underperforms, and whether one site's shortfall can be offset by others in the CSP's portfolio.
Term and exit: multi-year commitments are common because the CSP sells your capacity in auctions held a year or more ahead.

Illustrative earnings

Illustrative only. Assumptions: a manufacturing site commits a 300 kW reduction (for example, a capacity tag of 800 kW and a promise to drop to 500 kW when called); PJM's price and accreditation ratings as above; no loss factors; and a hypothetical contract paying the site 60% of gross capacity revenue. Your contract's terms will differ.

Delivery year	Gross capacity value (300 kW × rating × $/kW-yr)	Site's share at an assumed 60%
2026/27	$24,871	$14,923
2027/28	$33,592	$20,155
2028/29	$32,386	$19,432

Against that, count the cost of each event: lost output or overtime, staff time, and any controls or metering the CSP requires. A site that can shift a batch process or compressor load for a few hours usually comes out well ahead; a site that sends workers home or scraps product may not.

The capacity-tag trade-off

Demand response and tag management both reward low load on peak afternoons, but you can't sell the same kilowatt twice:

The capacity you can commit is generally measured against your tag: with the common "firm service level" approach, your commitment is your tag minus the level you promise to drop to.
If you cut your tag by curtailing during PJM's five summer peak hours, your future demand-response commitment shrinks by about the same amount.
Per kW, the two are close in value: about $108–$112 gross for demand response versus about $119–$122 of avoided tag cost — and the tag saving only reaches you on a pass-through or tag-repricing contract, while demand-response revenue is paid regardless of your supply contract.

Decide which you're optimizing for each site. Many sites do both partially, but do it deliberately, with your CSP and supplier both aware of the plan.

The risks

Performance. In summer 2025, S&P Global reported that PJM measured demand-response performance at about 67% during events, well below historical levels above 90%. PJM called load management six times that summer. Underperformance reduces payments and triggers penalties.

Year-round obligations. Annual demand response must be available from June through May; winter performance is measured against a winter peak load value rather than your summer tag. A site that can shed air conditioning in July may have little to shed on a January morning.

More frequent calls. PJM dispatched about 6,100 MW of demand response on July 2, 2026, the day of its all-time peak, and called pre-emergency demand response in the AEP zone and several others on September 1, 2026. With reserve margins below target, expect dispatch to be routine in extreme weather.

Baselines and testing. Your reduction is measured against a baseline or firm service level. Changes in operations — a new shift, added equipment — can make the commitment harder to meet. Sites not dispatched in a season may be tested.

Questions to ask a CSP

What share of capacity revenue do I receive, and is any of it guaranteed?
Who pays PJM penalties if I underperform, and is my performance netted with other sites?
Am I committing to summer-only or annual availability, and what winter reduction do you expect?
How many events and tests should I plan for, and what notice will I get?
How will my enrollment interact with my supplier contract and any tag-management plan?
What metering, controls or automation do you require, and who pays for it?

FAQ

How much can an Ohio business earn from demand response?

Gross capacity value is roughly $108–$112 per committed kW-year for 2027/28 and 2028/29 at capped PJM prices; your share depends on your CSP contract.

No. Businesses participate through a curtailment service provider, which registers the resource with PJM and splits the revenue with you under a private agreement.

What happens if I don't reduce load when called?

You earn less and may owe penalties under PJM's capacity rules, depending on how your CSP contract assigns them.

Can I do demand response and lower my capacity tag at the same time?

Partly. Cutting your tag reduces the capacity you can commit to demand response, so the benefits overlap rather than add up.