An August 2015 report by the Rocky Mountain Institute said that although the Supreme Court ruling would be “immensely important” for demand response, the industry was limited by “traditional, top-down grid paradigms.”

“By focusing on DR’s revenue potential in wholesale markets, a huge part of the core value proposition of demand flexibility is lost — namely, the economic benefits of flexible, controllable demand to individual customers,” it said.

The institute’s co-founder, Amory Lovins, is credited with inventing the term “negawatt” — power saved through conservation or efficiency.

The institute’s new report, The Economics of Demand Flexibility, coins a new term, “flexiwatts” — demand that can be moved across the hours of a day or night based on economic or other signals.

The report concludes that residential demand flexibility can save $9 billion per year in spending on transmission investments — a cut of more than 10% of forecast spending — and $4 billion annually in energy production and ancillary services. That could reduce consumers’ electric bills by 10% to 40%.

Flexiwatts can reduce capacity spending by reducing peak loads and flattening aggregate demand profiles of customers. In the energy market it can shift load from high-price to low-price times. They can also reshape load profiles to complement the increasing intermittent generation expected in response to EPA’s Clean Power Plan.

While DR is deployed infrequently and often used only as a last resort during peak demand, demand flexibility can be used continuously and proactively to reduce costs year-round, resulting in direct bill reductions instead of infrequent incentive payments.

Demand flexibility can use automatic controls to reshape a customer’s demand profile in ways that either are invisible to the customer (for example, using storage to decouple the timing of consumption from the grid impact) or minimally affect the customer (shifting the timing of non-critical loads within customer-set thresholds).

It also takes advantage of time-of-use or real-time pricing, demand charges and distributed solar PV export pricing to provide retail price signals directly to customers or through third-party aggregators.

See related stories:

• Legal Challenge Behind it, DR Seeks to Overcome Behavioral Resistance, Varying State Rules
• Clark Calls for New Look at Order 745
• A Half Century of DR