The traditional dichotomy is between incentive-based DR programs and time and price-based programs(Albadi & El-Saadany, 2008) .For the price-based programs, the load reduction occurs because prices have reached a pre-specified high level. Incentive programs require the customer to shed load in response to a system-wide events. in reality, the line between these programs is often blurry.
Among the incentive programs, market-based programs are growing in popularitydue to a recent high-profile FERC ruling [3]. FERC has mandated that wholesale energy market operators pay locational marginal price (LMP)[4] to demand response resources, effectively paying them as if they were analogous to traditional generating units such as natural gas plants.This has been seen as a boon to the demand response aggregators who can now enlist customers in DR programs and bid them load directly into wholesale markets, as opposed to being a middleman between utilities and customers. It has also encouraged a host of programs where customers can bid their loads in themselves. There will be more discussion of this ruling very soon.
