Demand response (DR) is a practice that can reduce utility costs for federal agencies. While participation in DR programs can be complex, Curtailment Service Providers (CSPs) help agencies navigate program requirements, coordinate participation, and maximize value. This resource outlines how federal agencies can access DR opportunities through CSPs, explains the role CSPs play in supporting participation, and highlights the federal resources available to agencies considering engagement.
How Does Demand Flexibility Support Demand Response?
Demand flexibility is the capability of a site to reduce or shift electricity use during specific periods. Sites with this flexibility can participate in demand response programs and markets (henceforth referred to as "DR programs") offered by utilities, Independent System Operators (ISOs), and Regional Transmission Organizations (RTOs), which incentivize load reductions or load shifts away from peak periods. By participating, federal agencies can reduce energy costs, earn incentives, and support grid reliability.
What Is a Curtailment Service Provider?
A Curtailment Service Provider, sometimes known as a demand response aggregator, is a third-party organization that helps sites participate in DR programs by managing enrollment, event operations, and performance verification. CSPs aggregate load flexibility from multiple sites and serve as their interface with utilities, ISOs, or RTOs, making DR participation simpler and faster while minimizing the time and effort required from federal building staff.
Typical CSP support can include:
- Engagement – Educating and consulting with facilities, explaining DR programs, assessing site energy usage, and identifying program and market opportunities that match flexibility capabilities.
- Evaluation – Conducting site visits, reviewing interval or equipment-level data, assessing major equipment, and developing a customized DR plan.
- Support and Operation – Enrolling sites, completing program documentation, managing test events, performing dispatch during grid events, ensuring compliance, and handling incentive payments.
Working with a Curtailment Service Provider
While federal agencies can enroll directly in some DR programs, others require participation through a CSP. In either case, working with a CSP simplifies participation in DR programs while reducing risk and staff burden. CSPs provide end-to-end support that enables federal agencies to capture value from their demand flexibility without compromising mission-critical operations.
Tip for Federal Sites
Engaging with multiple CSPs at the outset is a recommended best practice, as it allows federal sites to compare the support each provider offers and to negotiate an appropriate share of program incentives.
Key benefits of working with CSPs can include:
- Turnkey participation – CSPs can help manage the entire process, including program identification, enrollment, testing, dispatch, and compliance.
- Reduced administrative burden – CSPs can handle coordination with utilities, ISOs, and RTOs, minimizing contracting and operational complexity.
- Expertise – CSPs help ensure performance requirements, measurement and verification (M&V) requirements, and market rules are met.
- Revenue and value optimization – CSPs help identify the most appropriate programs and can enable participation across multiple opportunities where available.
- Operational flexibility – CSPs tailor strategies to site capabilities, using existing assets (HVAC, lighting, industrial loads, generators, batteries) while protecting mission needs.
Sites that choose to work with CSPs can participate with no upfront cost. CSPs are compensated by retaining a percentage of the program incentives earned, while the majority of financial benefits go directly to the site. This arrangement allows agencies to benefit financially from demand response participation without incurring additional expenses.
Engaging with Curtailment Service Providers Through the Defense Logistics Agency’s Master Agreements
Although federal agencies may enter into agreements directly with CSPs, using the Defense Logistics Agency (DLA) Master Agreements provides a simplified, lower-risk pathway for participating in demand response.
Tip for Federal Sites
If not going through the DLA to engage a CSP, federal sites are advised to submit the proposed agreement to their legal team for review to ensure compliance with federal government requirements.
Overview of DLA Energy Master Agreements
DLA Energy has signed agreements with multiple CSPs across the U.S. which can be used by sites to enroll in DR programs through a CSP. These master agreements primarily support participation in ISO/RTO demand response markets across many regions, with market-specific addenda applied as needed. Utility-sponsored programs administered through CSPs can also be supported by the DLA's master agreement.
Curtailment Service Providers Prequalified Under DLA's Master Agreement
- CPower
- Customized Energy Solutions
- Direct Energy Business
- Enel X
- Enersponse
- Grid Beyond
- NRG
- NuEnergen
- R Power
- Viridity
- Voltus
Benefits of Using DLA Master Agreements
Enrolling in a demand response program through a Curtailment Service Provider using a DLA Master Agreement provides the following benefits:
- Faster enrollment – Enables quicker enrollment in ISO/RTO markets through CSPs, compared with developing a site-specific contract.
- Protection from penalties for nonperformance – The DLA master agreements do not allow penalties due to lack of appropriation of funds.
- Defined term lengths and flexible termination – Terms are clearly established to reduce uncertainty, yet can be terminated by the site at any time, for any reason.
- Central point of contact – Provides a DLA point of contact for all federal agencies to seek subject-matter expertise and advice.
Learn More About Demand Response
Want to learn more about demand response programs? Explore FEMP's Demand Response and Time-Variable Pricing Programs website.
Work with a Curtailment Service Provider
Ready to work with a Curtailment Service Provider? Contact DLA Energy to take the next step.
Need Assistance?
Need assistance or have questions about demand response and Curtailment Service Providers? FEMP can help. Submit a request through FEMP's Assistance Request Portal.