How Does Demand Response Work for Homeowners? Complete 2026 Guide

Demand response is a program where your utility pays you to reduce electricity use during specific periods — usually hot summer afternoons when grid demand is highest. The concept sounds simple, but homeowners often have questions about exactly how it works, who runs it, how earnings are calculated, and whether it requires anything from them.

This guide explains demand response from a homeowner's perspective, from the first grid signal to the payment in your bank account. For New York homeowners, Meltek handles the entire process automatically — so the honest answer to "what do I need to do?" is: almost nothing.

On hot summer days, millions of air conditioners run simultaneously across New York City and Long Island, pushing electricity demand to near-record levels. The grid operator (NYISO for New York) must have enough power generation capacity to meet that peak demand — or it faces the risk of blackouts.

Building enough power plants to cover those few peak-demand days per year is expensive and wasteful — those plants would sit idle 350+ days per year. Demand response offers a cheaper alternative: instead of generating more power, reduce demand on the customer side. Utilities pay customers to temporarily reduce use, which keeps the grid in balance without expensive new infrastructure.

This is why demand response payments are real money — utilities are paying you a fraction of what new power generation would cost them, and passing the savings to the people who help solve the problem.

Here is the complete chain of events that turns a hot summer day into a payment:

1. The grid operator identifies a stress day
NYISO monitors weather forecasts and electricity demand projections. When it expects demand to approach grid capacity, it issues a demand response event call — usually the day before, by 7 PM.

2. The utility notifies enrolled customers
Con Edison, PSEG Long Island, or Orange & Rockland sends event notifications to enrolled programs. Through Meltek, you receive a push notification or email like: "A demand response event is scheduled for tomorrow, 2–6 PM."

3. Meltek precools your home
Before the event starts, Meltek lowers your thermostat to build a thermal buffer. Your AC runs more than usual during this window, chilling your home's air mass and thermal materials so the temperature holds steady when curtailment begins.

4. The event runs (you do nothing)
During the 2–4 hour event window, Meltek raises your thermostat 2–4°F. Your AC runs significantly less. Because of precooling, indoor temperatures barely change — most Meltek customers report no discomfort.

5. Your curtailment is measured
The utility compares your actual electricity use during the event to your baseline — an estimate of what you would have used without the event, based on your usage history at similar temperatures and times. The reduction below baseline is your curtailment in kWh.

6. You get paid
Your curtailment × the utility's payment rate = your earning for that event. Meltek aggregates earnings across all season events and transfers them to your bank account 30–60 days after season end.

Your baseline is the key to demand response earnings. If your baseline is calculated high, your curtailment is larger and earnings are higher. The baseline calculation method varies by utility and program, but most use a rolling average of your energy use on comparable days:

• Typical method: Average usage during the same 2-hour windows on the 10 most recent non-event weekdays with similar temperatures
• Day-of adjustment: Some programs adjust the baseline using your actual usage in the 2 hours before the event starts
• What this means practically: Homes that normally run AC heavily in the afternoon have higher baselines — and therefore more curtailment potential per event. Homes that already conserve energy have lower baselines and earn proportionally less.

Meltek's precooling strategy is designed with the baseline in mind: the AC runs more during the pre-event window, which can elevate same-day baselines and increase net earnings on programs that use same-day adjustment factors.

Through Meltek, demand response participation requires almost no ongoing effort. Here is the complete homeowner action list:

One time (enrollment):

• Enter your ZIP code at meltek.com/join
• Connect your smart thermostat (takes 2 minutes)
• Set your minimum comfort temperature and notification preferences

Each season (optional):

• Verify your bank account details for payment transfer
• Review your event summary notifications (informational — no action needed)

During events (optional):

• Override in the Meltek app if you ever need to for comfort or health reasons

That's it. Meltek handles precooling, thermostat management, utility reporting, and payment processing. Most enrolled homeowners describe the experience as completely invisible — money arrives at the end of summer with minimal awareness that anything happened.