Natural Gas Demand Response Pilot Program

Funding Agency:
Department of Energy

Demand response programs are commonplace features in retail electricity markets and aim to reduce (and optimize) energy consumption by promoting more transparent price signals of the resource costs of energy consumption to end-users. Demand response programs can improve system reliability through tailored deployment across different demand sectors to achieve reductions in energy and meet energy efficiency goals. These programs have become a critical tool for electric utilities to help manage the load during times of peak demand.

Based on the success of these programs in the electricity markets, as well as a growing number of challenges with natural gas supply, government, regulators and industry are exploring demand response programs for natural gas systems. Similar to the electricity demand response programs, natural gas demand response (NGDR) programs aim to reduce consumption by end-users during peak demand periods. To encourage end-users to reduce their consumption, both electricity and natural gas demand response programs rely on a variety of incentive structures including but not limited to –changes in the per-unit price paid for consumption during peak periods compared to off-peak periods, incentive payouts, and/or social pressures.

While the overarching goal of a NGDR program is the same as that of an electricity demand response program – to reduce consumption at the peak – peak usage for natural gas, primarily for space heating, occurs during the cold winter months rather than during certain hours of the day. Natural gas utilities establish plans for how they will meet gas demand over the course of the year based on the relationship between historical gas deliveries and projected weather patterns. As a result, the relevant planning period for a NGDR program is over the course of a year rather than a 24-hour day.

In general, demand response programs aim to manage energy consumption (usage) during periods of peak demand. To supply natural gas to their customers, loadserving entities use a combination of 1) firm service contracts, wherein an agreedupon supply of natural gas that cannot be curtailed except under unforeseeable circumstance is scheduled to be delivered, and 2) peaking service contracts that do not guarantee delivery of natural gas.

The current scale of NGDR pilot programs is insufficient to inform and assess a nationwide benefit. The pilot studies noted above indicate that a “one size fits all” approach that can be applied across all regions of the U.S. is not feasible. However, depending on the situation of supply and demand, time of year, or region, utilities may face supply challenges. Industry sectors facing these potential supply challenges are likely to already have traditional interruptible rates in place and are focused on creating more flexibility without incurring large costs. Utilities are interested in NGDR because they anticipate a need to better plan for scenarios in which expansion of distribution systems may be constrained, or other possible contingencies associated with the availability of natural gas in some sections of their system that must be addressed. In addition, utilities may have an interest in developing innovative demand response programs that can integrate electric-gas coupled approaches, for which they need to first establish a baseline understanding of NGDR-only processes. Lastly, NGDR may prove to be advantageous for utilities that seek to increase the flexibility of their demand while also meeting environmental goals (e.g., net emission savings during certain periods).

This FOA seeks to support the development of up to four NGDR pilot programs in an effort to expand on lessons learned from the previously-completed NGDR pilot programs.


Deadline: Dec. 31, 2021

Agency Website

Eligibility Requirements

Applicants may submit more than one Full Application to this FOA. Each application must describe a unique, scientifically distinct project.

Funding Type





Engineering and Physical Sciences
Environmental & Life Sciences
Social Sciences

External Deadline

December 31, 2021