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Are Smart Homes More Efficient?

March/April 2007
This article originally appeared in the March/April 2007 issue of Home Energy Magazine.
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March 09, 2007
A residential automated demand response program works on reducing California's peak time loads.
For nearly 25 years, utilities have been trying out various programs designed to get customers to reduce their loads during times when power is scarce. These demand response (DR) programs, which typically use either direct messaging or pricing signals to alert customers to power scarcities, can bring substantial benefits. Utilities can “purchase” load from their customers for lower rates than they would pay to provide it, lowering the utility system’s peak demand and helping to reduce peak wholesale power market prices.  In addition, customers can be asked to reduce load during nonpeak periods to help maintain grid reliability, defer or eliminate generation capacity expansion, or defer or eliminate transmission/distribution capacity expansion. Now, new smart meters and gateway systems can make such demand response in homes and small businesses convenient, effective, and economical.

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