LADWP Approves $195 Million to Expand Demand Response Portfolio
- Grid Services & Demand Response News Policy & Markets
Marin Holt
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- LADWP board approved $195 million investment on October 30, 2025 to scale demand response from 80 MW to 340 MW
- Commercial and Industrial DR program expands from 38 MW to 220 MW, nearly a sixfold increase
- C&I incentives: $10-$15/kW/month plus $0.25/kWh per event; minimum 100 kW curtailment required
- New EV managed charging and IoT device programs add 15 MW of combined demand flexibility
- ERCOT interconnection queue carries 225+ GW of large loads; PJM 2026-2027 capacity cleared at $329/MW-day
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The Los Angeles Board of Water and Power Commissioners approved a $195 million investment on October 30, 2025, to expand LADWP’s demand response portfolio from 80 MW to 340 MW of performance-based load flexibility by 2031. The plan scales the Commercial and Industrial DR program from 38 MW to 220 MW and the residential Power Savers Program from 42 MW to 100 MW, while introducing new managed EV charging and IoT device programs adding 15 MW of combined capacity.
Why It Matters
Utilities across the West are leaning on demand response because it sidesteps the multi-year permitting and construction that new peaker plants and transmission lines require, and LADWP’s 340 MW target is large enough to offset a mid-size gas unit. Whether it delivers depends on participation: more than half the added capacity relies on customer-owned EV chargers and smart appliances the utility does not dispatch directly, so the payoff hinges on sustained enrollment rather than firm, utility-controlled assets. For Los Angeles ratepayers, the near-term test is whether $195 million in incentives actually trims the peak-demand events that drive infrastructure costs across the system.
Program Structure and Incentive Rates
The expanded Commercial and Industrial Demand Response program offers $10 per committed kilowatt per month for day-ahead advance notice or $15 per committed kW per month for 2-hour advance notice curtailments, plus $0.25 per kWh for actual demand curtailment per event. Eligible non-residential customers must be able to reduce at least 100 kW of load on weekdays between 1 p.m. and 9 p.m. during the curtailment season. The program targets peak demand events on the LADWP system that drive infrastructure investment costs for all ratepayers.
New programs include a 5 MW Commercial EV Managed Charging program allowing businesses to schedule fleet charging during off-peak hours, a 10 MW Residential EV Managed Charging program for homeowners, and a 5 MW Internet-of-Things Device Program enrolling smart appliances including refrigerators, dryers, washers, and air conditioning units for automated demand reduction events.
Grid Infrastructure and Technology Platform
LADWP will deploy a centralized Demand Response Management System as the technology backbone for the expanded portfolio. The DRMS platform will provide real-time monitoring of enrolled resources, automated dispatch during grid stress events, and forecasting tools to optimize demand response scheduling. LADWP also targets installation of 1.5 million smart meters by 2031, enabling two-way communication necessary for automated demand response across residential and small commercial accounts.
LADWP CEO Janisse Quinones stated the programs “bring all around benefits to our customers by protecting our electrical infrastructure in periods of high demand, further empowering our customers to manage their electric consumption, and reducing energy costs.” The investment supports California’s mandate for 100% clean electricity and parallels similar large-scale demand response expansions at other utilities facing grid reliability pressure from data center load growth and extreme weather events.
National Demand Response Context
The LADWP expansion reflects broader utility action to build demand-side flexibility. ERCOT’s interconnection queue now carries more than 225 GW of large loads, and PJM’s 2026-2027 capacity auction cleared at $329 per MW-day, driven primarily by data center load growth that pushed capacity market revenues up $7.2 billion, or 82%, above prior auction levels. Dominion Energy proposed a 450 MW virtual power plant pilot in Virginia in September 2025, and SPP is developing Price Adaptive Load services for large loads seeking real-time price-responsive operation. The IEA projects demand response and battery storage must collectively provide 500 GW of flexibility by 2030 to meet Net Zero pathway requirements, a target the IEA identifies as currently off-track.
Critical Perspective
LADWP’s historical demand response enrollment illustrates the challenge ahead. The Power Savers program currently holds 42 MW against a 100 MW target, requiring 2.4x growth over six years for that program alone. The proposed IoT and EV managed charging programs depend on customer-owned devices that LADWP does not operate or control, introducing enrollment volatility that utility-owned assets do not carry. The $195 million investment lacks a disclosed per-megawatt cost comparison: a 340 MW natural gas peaker in Southern California costs roughly $600 to $800 per kilowatt in capital, putting equivalent dispatchable capacity at $200 to $270 million, against which this demand response program must deliver equal or greater grid reliability.
