Electrical manufacturers are welcoming a ruling this week by the U.S. Federal Energy Regulatory Commission (FERC) on setting compensation for demand response participation. The new policy is expected to give a significant boost to demand for “smart grid” technologies.

The FERC policy, RM10-17, requires electric utilities and retail market operators to pay participants in demand response programs the market price per kilowatt for reducing electrical loads when those reductions (often called “negawatts”) will balance the grid's supply and demand and avoid the need for bringing additional generation capacity online.

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