Commercial Demand Response Pilot Program

HG&E’s Commercial Demand Response Program incentivizes commercial and industrial customers who reduce power usage, or electric ‘demand’, during certain times each month when demand for electricity is highest across the entire New England grid, including locally in Holyoke. These are known as “peak events”, and they typically occur in the evening hours during heat waves. HG&E incurs significant charges based on the one highest hour each month where the total electric demand across our region is the most; therefore, reducing electric demand during peak events helps keep rates down for all customers.  For more information on peak electricity and how this impacts HG&E and its customers, please visit the Peak Electricity Demand webpage.

Customers who enroll in HG&E’s Commercial Demand Response Program will be eligible to participate by either reducing their electric consumption (known as “curtailment”) or dispatching non-emitting grid-connected or back-up generators (i.e., energy storage, green hydrogen, etc.) throughout peak events.

Performance Payment*: $6/kW per month
kW = kilowatt, a measure of how much power, or demand, is used for one single hour
*Payment based on kW reduction during coincident monthly peak hour

Summary of the program details, based on historical peaks
Number of Events per Month
 Performance Incentive
Length of Events**
3 Hours
Peak Days**
Weekdays (potentially Weekends and Holidays although rare)
Peak Event Time**
4-7 PM 
Notification Time**
11 AM to 1 PM
Payment Method
Direct On-bill Credit (monthly)
Non-Performance Penalty

**subject to change based on anticipated peaks

Additional Information

Customers interested in enrolling in the Program must be a Commercial or Industrial customer with an active electric account and a monthly maximum demand of 100 kW or greater at the facility where the demand response will be implemented. Customers who participate in ISO-NE’s Demand Response Program are not eligible to participate in HG&E’s Program.

HG&E will call on Customers enrolled in the program between 1 and 5 times per month. Peak events typically occur on weekday evenings from 4-7 PM, however can fall outside of this time window and sometimes on weekends or holidays. Customers will be notified before each anticipated peak and will be compensated for their performance if participation occurs during actual peak day and hour. HG&E will notify the customer of the actual monthly peak day and hour along with their performance shortly after the month has ended.

HG&E will provide a $6/kW per month performance incentive for demand reduced during the monthly peak based on the reduction amount as defined in the calculation provided in the section below. There is no penalty for non-performance.

Eligible curtailment methods include, but are not limited to, direct load control, building automation systems, manual HVAC adjustments, lighting, refrigeration, industrial processes, or on-site or grid-tied generation. On-site or grid-tied generation must be non-emitting sources in order to participate in the program.

Additional program details can be found in the Commercial Demand Response Program Materials.

Performance payments for customers who participate by curtailing their electric demand will be paid based on the following performance calculation methodology:

Performance (kW) = (Adjusted Baseline) – (Average Demand During the Hour of the Actual Coincident Peak Event)


  • Performance = Customer’s average performance (in kW) throughout the hour of the actual monthly coincident peak event as determined by HG&E using twelve 5-minute intervals.
  • Adjusted Baseline:
    • This is what the customer’s estimated electric demand would have typically been during the time of the peak event.
    • Adjusted Baseline Calculation: Adjusted Baseline = Unadjusted Baseline + Baseline Adjustment
      • Unadjusted Baseline:
        • Average actual demand from the past 10 similar days during the hour of the peak event. For example, if the coincident monthly peak event occurs from 5-6 pm, the unadjusted baseline is the average demand from 5-6 pm over the past 10 similar days.
          • The past 10 similar days are the 10 most recent similar days before the peak event day. Similar days do not include weekends, holidays, or other demand response events.
          • Shutdown Days will be recognized via metering data and will be excluded from the performance calculation.
          • If peaks occur during a customer shutdown period, no performance compensation will be provided as no active demand response was performed.
        • Baseline Adjustment:
          • The baseline adjustment is used to account for the fact that the day of the peak event may be hotter or colder than the last 10 similar days, and the customer’s load may subsequently be higher or lower on the day of the peak event than it was during the past 10 days (i.e. due to increased air conditioning or heating use).
          • The baseline adjustment may be positive or negative.
          • Baseline adjustment calculation: Baseline Adjustment = (Customer’s average electric demand on the day of the peak event during the baseline adjustment interval) – (Customer’s average electric demand over the past 10 similar days during the baseline adjustment interval)
            • For example, if a customer’s demand during the baseline adjustment interval is typically 150 kW, but on the day of the peak event, their demand is 175 kW during the same time interval, the baseline adjustment would be 25 kW, and this would be added to the unadjusted baseline to determine the value of the adjusted baseline.
            • The baseline adjustment is limited to plus or minus 20% of the unadjusted baseline.
          • Baseline adjustment interval:
            • The baseline adjustment interval will typically be the average demand during a two-hour window 3 to 5 hours prior to the peak event. For example, if the peak occurs between 5-6 PM, the baseline adjustment interval used will be between 1-3 PMComDemResExample.jpgComDemResBasline.png


  • Turn off unnecessary appliances, equipment, and lighting (or dimming lights).
  • Use energy management systems, automated controls, building management systems, or software and controls.
  • Raise the thermostat temperature a few degrees to reduce air conditioner use.
  • Use eligible non-emitting grid-tied or on-site generation (i.e. battery, green hydrogen, etc.).
  • Adjust various process loads.
  • Reduce speeds on variable frequency drives.
  • Keep cooler doors closed.
  • Turn off or reduce the use of various electric appliances such as unused computers, domestic hot water (if electric hot water), refrigeration, etc.
  • Restrict use of electric vehicle charging stations.

These Program materials and participation in HG&E’s Commercial Demand Response Program are pursuant to and subject to the Terms and Conditions in effect for customer applications at the time that the application is approved by HG&E. See the Commercial Demand Response Program application for more details.

Please click the link below to review the Terms & Conditions:

HG&E’s Commercial Demand Response Program Terms & Conditions


Contact Michael Curtin
Technical Support Engineer - Key Accounts

Tel: (413) 536-9319