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Federal Trade Commission staff submitted a comment in response to a request from the Public Utility Commission of Texas (PUC) for comments on demand response (DR) as one aspect of the PUC’s ongoing review of the reliability of electricity markets.

The FTC staff comment noted that DR programs give electricity customers an incentive to reduce or reschedule power consumption when electricity is scarce and expensive, which saves money by reducing consumption during peak demand periods, encourages electricity generators to bid competitively, and reduces price volatility.

The FTC staff comment encourages the PUC to adopt DR policies that use standard market approaches, allow competition, and offer accurate price signals to all entities that can contribute to balancing the amounts of electricity consumed and supplied.  “In particular, if Texas offers good incentives for retailers to enroll consumers in DR programs, it can then harness competition among retailers to offer innovative DR programs that provide the greatest benefits to electricity consumers,” the comment states.

The Commission vote approving the comment was 4-0. (FTC File No. V130005; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702.)

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