How Ohio Businesses Can Use Demand Response Programs to Offset Rising Summer 2025 Electricity Costs

Business Type: General Commercial

How Ohio Businesses Can Use Demand Response Programs to Offset Rising Summer 2025 Electricity Costs

Your Ohio commercial electricity costs are rising. You know it, you've seen it in your bills, and you've probably already started asking what you can do about it. Most of the strategies discussed in energy conversations focus on what you spend — competitive supplier contracts, efficiency upgrades, solar investments. But there's a strategy that actually pays you for managing your energy — and most Ohio business owners have never heard of it.

It's called demand response, and it's one of the most underutilized cost management tools in Ohio's commercial energy landscape. Demand response programs pay businesses to voluntarily reduce their electricity consumption during specific high-demand periods on the grid. For Ohio businesses already facing the dual pressure of high Ohio business electricity rates 2025 and elevated PJM capacity costs, demand response offers a rare opportunity to simultaneously reduce next year's energy costs and earn direct revenue.

This article explains why Ohio electricity costs are surging in summer 2025, exactly how demand response programs work, which programs Ohio businesses can access, and how to enroll so you can start capturing these savings before the critical summer peak season arrives.

Why Ohio Business Electricity Costs Are Surging in Summer 2025 (And What You Can Do About It)

The Perfect Storm Behind Summer 2025 Electricity Costs

Summer has always been the most expensive season for commercial electricity in Ohio. But summer 2025 arrives against an unusually challenging backdrop:

Record-High PJM Capacity Prices

The July 2024 PJM Base Residual Auction set capacity prices for the 2025/2026 delivery year at over $270/MW-day — an 800%+ increase from the prior year. These elevated capacity prices began flowing into commercial electricity bills starting in June 2025. For businesses on variable rates or whose fixed-rate contracts recently expired, the cost impact is immediate and significant.

AI and Data Center Load Growth

Ohio's data center expansion — Intel in New Albany, AWS, Google, Meta, and Microsoft investments across Central Ohio — has added gigawatts of new flat-load electricity demand to the AEP Ohio zone. This additional demand pressure tightens reserve margins during summer heat events, increasing both the probability and severity of pricing spikes.

Aging Generation Fleet

Retirements of coal and older gas plants throughout the PJM footprint have reduced the dispatchable reserve margin — the buffer of available generation above expected peak demand. A tighter reserve margin means that extreme heat events are more likely to trigger grid emergency conditions and the associated price volatility.

Structural Supply-Demand Imbalance

PJM's load forecasts project that demand growth (primarily from data centers and electrification) will outpace new generation additions through at least 2026. This structural supply-demand imbalance is the fundamental driver of elevated capacity prices and the heightened risk of summer pricing emergencies.

The Good News: The Grid Needs Your Help — And Will Pay for It

The same supply-demand imbalance that's driving your electricity costs higher creates an opportunity. When demand threatens to exceed available supply, the grid operator has two choices: build more generation (expensive, slow) or pay existing customers to use less (cheap, fast). Demand response programs represent this second option, and they funnel real dollars to businesses that participate.

From PJM's perspective, a business that voluntarily reduces 500 kW of demand during a peak emergency is equivalent to having an additional 500 kW of generation available — and it costs far less than building a new power plant. The savings that demand response programs create for the overall grid are shared with participating businesses through direct payments, bill credits, and reduced capacity cost assessments.

What Are Demand Response Programs and How Do Ohio Businesses Qualify to Save Big?

The Mechanics of Demand Response

Demand response (DR) programs are structured agreements between an electricity consumer (your business), a program administrator (a utility, PJM, or a third-party aggregator), and the grid operator (PJM). Under these agreements:

Your business agrees to reduce its electricity consumption by a specified amount (your "curtailment capacity") when called upon
You receive advance notice of curtailment events (typically 30 minutes to 24 hours)
You curtail your load during the event by reducing or shutting down non-essential equipment
Your actual curtailment is verified by comparing your metered usage to a calculated "baseline"
You receive payment based on how much you actually curtailed

Payment structures vary by program type, but most pay businesses based on their committed curtailment capacity (capacity payment) and/or their actual performance during events (performance payment).

Types of Demand Response Programs Available to Ohio Businesses

PJM Emergency Load Response Program (ELRP)

The ELRP is PJM's emergency-tier demand response program. It activates when PJM determines that grid conditions are at risk of becoming an emergency. ELRP events are relatively rare (a few times per year at most) but pay the highest rates — often $500-$1,000+ per megawatt-hour of curtailment during emergency conditions.

For enrollment and participation, businesses typically work through a third-party demand response aggregator who handles the technical requirements of baseline verification, metering, and curtailment reporting.

PJM Economic Demand Response

The economic demand response program allows businesses to submit bids into PJM's day-ahead energy market to curtail load at a specified price. If PJM's clearing price exceeds your bid price, your business is activated to curtail. This program suits businesses with operational flexibility and an understanding of energy market pricing.

Utility Demand Response Programs

Ohio's major electric utilities offer their own demand response programs that operate alongside PJM's programs:

AEP Ohio CurtailSense: AEP's commercial and industrial demand response program for customers in the AEP service territory. Pays customers to reduce demand during system emergencies and high-cost periods.
Duke Energy Ohio Demand Response: Duke offers demand response for commercial and industrial customers, including both interruptible rate structures and traditional DR programs.
FirstEnergy Demand Response: Ohio Edison, The Illuminating Company, and Toledo Edison offer DR programs with various structures for commercial customers.
AES Ohio Demand Response: AES Ohio offers commercial DR programs for customers in the Dayton service area.

Third-Party Demand Response Aggregators

Several national companies — including EnerNOC (now Enel X), Voltus, and CPower — operate in Ohio as demand response aggregators. These companies:

Aggregate multiple smaller commercial customers into a combined curtailment resource
Handle the technical complexity of PJM registration and compliance
Provide monitoring software and peak alert notification services
Sometimes offer guaranteed minimum payment levels

For smaller commercial customers (100-500 kW) who may not meet minimum thresholds for direct PJM participation, aggregators provide a critical pathway to demand response revenue.

Qualification Requirements: Does Your Ohio Business Qualify?

Most Ohio demand response programs have minimum demand requirements:

Program	Minimum Demand	Typical Payment Range
PJM ELRP (direct)	100 kW	$500-$1,200/MWh
PJM Economic DR	100 kW	Market-clearing price
AEP CurtailSense	50-100 kW	$50-$200/MWh
Duke Energy DR	50 kW	$75-$175/MWh
Third-party aggregator	25-50 kW	Varies by aggregator

Business types that are excellent candidates for demand response include:

Manufacturing plants with flexible production scheduling
Warehouses and cold storage with thermal mass that can absorb temporary temperature adjustments
Office buildings and retail with flexible HVAC setpoints
Grocery stores and food service with temperature management flexibility
Educational institutions and hospitals (with careful management of critical systems)

Businesses that are poor candidates for demand response include those where any interruption to specific systems creates safety risks, product quality risks, or regulatory compliance issues without careful planning and exclusions.

Top Demand Response Strategies Ohio Businesses Are Using to Cut Summer Energy Bills in 2025

Strategy 1: Temperature Setpoint Management

The simplest and most commonly deployed demand response strategy is pre-conditioning and setpoint relaxation for HVAC systems:

Pre-conditioning: Before an anticipated DR event, lower the building temperature by 2-4°F. The thermal mass of the building then allows the thermostat setpoint to be raised during the DR event without occupants experiencing discomfort — the building slowly re-warms from the pre-cooled state.

Setpoint relaxation: During the DR event, raise cooling setpoints by 4-6°F from normal operational settings. For most commercial buildings, this can sustain occupant comfort for 2-4 hours while significantly reducing HVAC power draw.

The energy demand reduction from HVAC setpoint management in a typical commercial office building ranges from 15-35% of total facility demand during the DR event — a meaningful and easily achievable curtailment.

Strategy 2: Production Scheduling Shifts

For manufacturers, food processors, and other businesses with flexible production schedules, shifting energy-intensive operations outside of DR event windows is often the most impactful strategy:

Running heavy equipment during overnight and early morning hours
Concentrating maintenance and equipment-intensive tasks in off-peak windows
Pre-producing inventory ahead of anticipated peak periods
Staggering equipment startups to reduce simultaneous demand

A manufacturing facility with 2 MW of total connected load might be able to shift 400-600 kW of non-time-critical operations, creating a significant curtailment capability.

Strategy 3: Lighting Reduction

Commercial lighting typically represents 15-30% of a facility's total electricity consumption and is often among the easiest loads to curtail without operational impact:

Reducing lighting levels in non-critical areas (storage, service corridors, parking structures) by 30-50%
Turning off decorative or non-essential lighting entirely
Utilizing daylighting zones more aggressively during peak events

For a 100,000 square foot commercial facility, lighting curtailment alone might yield 30-80 kW of demand reduction — a meaningful contribution to a DR curtailment target.

Strategy 4: Compressed Air and Process Systems

For industrial and manufacturing facilities, compressed air systems are often significant energy consumers with operational flexibility:

Reducing system pressure by 10-15 PSI during DR events (each 2 PSI reduction typically saves ~1% of compressor energy)
Disabling compressors serving non-essential end uses
Allowing header pressure to draw down during short DR events

Process cooling systems (glycol chillers, process water cooling) often have similar flexibility, with thermal mass in heat exchangers providing a buffer during temporary curtailment.

Strategy 5: PLC Management Through DR Participation

Beyond the immediate payment benefit, one of the most financially significant reasons to participate in demand response is Peak Load Contribution (PLC) management. By reducing your facility's demand during PJM's 5-CP hours — which are identified in retrospect as the five highest peak hours of the summer — you reduce your PLC for the following year.

Your PLC directly determines your capacity charges for the next 12 months. A 10% reduction in your PLC translates to a 10% reduction in the capacity component of your electricity bill — which, at current elevated capacity prices, could be $5,000-$100,000+ in annual savings depending on your business size.

The 5-CP hours and DR events are often the same: the grid conditions most likely to trigger a DR activation are also the conditions most likely to set PJM's seasonal peak. Participating in demand response thus provides a double benefit: direct DR payment and future PLC reduction.

How to Enroll in an Ohio Demand Response Program Today and Start Offsetting Rising Electricity Costs

The Enrollment Process: Step by Step

Enrolling in an Ohio demand response program is more straightforward than most businesses expect. Here's the process:

Step 1: Determine Your Curtailment Capability

Before approaching any program, assess what load curtailment you can realistically provide. Review your facility's largest loads (HVAC, process equipment, lighting, compressed air) and identify which can be reduced without critically affecting operations during a 2-4 hour DR event. A rough estimate of your curtailable load (in kW) is the foundation of every DR enrollment conversation.

Step 2: Contact Your Utility or a DR Aggregator

For businesses with 100+ kW of curtailable load:

Contact your utility's commercial customer services team and ask about demand response programs
Or contact a third-party aggregator (Enel X, Voltus, CPower) for an enrollment consultation

For businesses with 25-100 kW of curtailable load:

Third-party aggregators are typically the best path, as they can aggregate your load with others to meet minimum program thresholds

Step 3: Complete the DR Enrollment Application

The enrollment application typically requires:

Account information and historical demand data (usually provided by your utility)
Description of your proposed curtailment measures
Contact information for your on-site DR coordinator (the person who will receive event notifications and execute the curtailment plan)
Metering information (your utility's meter data is the basis for baseline and curtailment measurement)

Step 4: Install Any Required Monitoring Equipment

Some DR programs require interval metering (15-minute data) or communication equipment to provide real-time demand verification. Your utility or aggregator will advise whether upgrades are needed and who is responsible for the cost.

Step 5: Train Your Team and Activate

Once enrolled, ensure that everyone involved in executing your DR curtailment plan knows their role. Key actions:

Designate a DR event coordinator who monitors alerts and initiates curtailment
Document the specific steps each department takes during a DR event
Conduct a practice drill before the peak season to ensure smooth execution

Conclusion: Demand Response Is the Underused Weapon Against Summer 2025 Electricity Costs

Ohio businesses are facing a summer of elevated electricity costs driven by structural market forces — PJM capacity prices, data center demand growth, and tight generation reserves. Demand response programs don't eliminate these pressures, but they provide a meaningful financial offset that is available right now, for free, to any Ohio commercial customer with the flexibility to curtail during peak events.

The combination of direct DR payments, PLC reduction benefits, and enhanced operational awareness of energy use makes demand response one of the highest-ROI energy strategies available to Ohio businesses. And unlike efficiency investments or solar installations, enrollment and initial participation require no capital investment.

The summer peak season is coming. The grid will call on its demand response resources. Ohio businesses that are enrolled and ready will profit. Those that aren't will simply pay the higher bill.

Enroll in Ohio Demand Response Before Summer 2025 Peak Season

Our energy team can connect you with the right Ohio demand response program for your business size and industry, and help you build a curtailment plan that maximizes your DR revenue and reduces next year's capacity costs.

Start Your DR Enrollment Today

Frequently Asked Questions: Ohio Demand Response Programs

Q: What are demand response programs and how do they benefit Ohio businesses? A: Demand response programs pay commercial businesses to voluntarily reduce their electricity consumption during high-demand periods on the grid. Ohio businesses benefit through direct cash payments or bill credits for curtailment, reduced Peak Load Contribution (PLC) that lowers next year's capacity charges, and contributing to grid reliability that benefits the broader community.

Q: How much can my Ohio business earn from demand response participation? A: Earnings depend on your curtailable load, program type, and how many events occur. A business with 200 kW of curtailable load participating in PJM's Emergency Load Response Program might earn $5,000-$15,000 per year in DR payments, plus potentially $10,000-$30,000 in reduced capacity charges from PLC management — a combined benefit of $15,000-$45,000 annually.

Q: Does demand response participation affect my regular business operations? A: DR events are typically short (1-6 hours) and occur infrequently (a few times per year at most for emergency programs). Businesses design their curtailment plans to minimize operational impact by targeting non-essential loads. In practice, most participating businesses report minimal disruption when they have a well-designed curtailment plan in place.

Q: What happens if my business can't curtail during a DR event? A: Failure to curtail during a DR event (called "non-performance") typically results in forfeiture of the performance payment for that event. Repeated non-performance may result in removal from the program. It's important to only commit to curtailment levels you are confident you can achieve during any business day.

Q: How far in advance are Ohio businesses notified of demand response events? A: Notification windows vary by program type. Day-ahead economic programs provide 24-hour notice. Emergency programs typically provide 30 minutes to 2 hours of advance notice. Some programs have both day-ahead and same-day tiers. Your enrollment should include multiple notification channels (phone, email, text) to ensure timely awareness.

Q: Is there a cost to enroll in Ohio demand response programs? A: Most Ohio demand response programs, including utility-sponsored programs and third-party aggregator programs, are free to enroll in. Your primary investment is the time to design your curtailment plan, train your team, and potentially purchase or upgrade monitoring equipment. Some aggregators cover metering equipment costs as part of their service.

Q: Can my business participate in multiple demand response programs simultaneously? A: It depends on the programs. Some programs prohibit double-stacking commitments for the same load. However, it's often possible to participate in a utility program for one portion of your load and a PJM program for another, or to sequence enrollment across programs. An experienced DR aggregator can help you structure maximum participation without conflicting commitments.

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