Demand Response for Commercial Tenants in ComEd Territory

Demand response is often described as if every participant were a factory that owns its building and its meter. For commercial tenants, the reality is more tangled: the load, the meter, the lease, and the payment can all sit with different parties. This article looks at demand response specifically from the tenant's position in ComEd territory, where northern Illinois sits in the PJM market, and works through who controls load, how submetering changes the picture, and how incentives can be split fairly with a landlord.

What demand response is, in plain terms

Demand response means reducing or shifting your electricity use in response to a signal or a price, sometimes in exchange for a payment. When the grid is stressed or wholesale prices spike, instead of adding more supply, the system leans on participants to consume less for a defined window. For a commercial tenant, that might mean raising a thermostat setpoint, dimming or staging lighting, or pausing non-essential equipment during a called event.

Importantly, demand response does not change your delivery relationship. ComEd remains the delivery utility that owns the wires and meter and restores power during outages. Participating in demand response is a voluntary reduction of your own load, not a handoff of the utility relationship. For the broader context of buying and managing power in the state, our commercial electricity overview sets the stage, and the ComEd utility page covers the delivery side.

The first question: who controls the load?

For a tenant, everything starts with control. Demand response only works if someone can actually reduce the relevant equipment during an event. In leased space, control is frequently divided:

• The tenant may control lighting, plug loads, and equipment inside the leased premises but not the building's central systems.
• The landlord may control central HVAC, chillers, and common-area systems that represent a large share of the building's load.
• In some buildings, a property manager or building automation system controls setpoints on the tenant's behalf.

Before considering any program, map which loads you can actually curtail and by how much. A tenant who controls only a modest slice of the building's total load has a different opportunity than one who controls major equipment. This is also where your usage history matters; our guide on requesting and using interval data explains how to get the interval records that show what your controllable load looks like hour by hour.

The second question: who holds the meter?

The metering arrangement determines whether a tenant can participate directly. Two common situations:

A separately metered tenant that is the utility customer of record has the cleanest path. The load reduction, the meter, and the account all point to the same party, so participation and any resulting value flow to the tenant directly.

A tenant on a landlord's master meter generally cannot participate independently. The utility relationship runs through the landlord, and the metered load reduction is measured at the building level, not the tenant level. In that case, participation has to be coordinated with the landlord, and the value has to be divided somehow, which is where the harder problems begin.

The split-incentive problem

The classic obstacle in leased space is the split incentive: the party who can act is not the party who benefits. If a landlord controls central HVAC but the tenant pays the energy bill, the landlord has little direct reason to curtail and the tenant lacks the control to do it. Flip the arrangement and the mismatch simply reverses. Because the actor and the beneficiary differ, neither party is fully motivated, and the opportunity stalls.

Demand-response payments add another layer to the same problem. If a building master meter earns a curtailment payment, who has earned it, the landlord who signed up the building or the tenants who reduced their load? Without an agreement, the default answer is whoever holds the meter, which may not be who did the work.

How submetering changes the picture

Submetering is often the key that unlocks tenant participation in a master-metered building. A submeter measures an individual tenant's usage within the larger building, making each tenant's consumption and each tenant's reduction visible. Once you can see who curtailed and by how much, you can attribute both the effort and the reward.

That visibility is what makes a fair arrangement possible. If a building participates in demand response and a submetering system shows that specific tenants delivered the reduction, the parties can allocate the incentive to match the contribution instead of defaulting to the meter holder. Submetering does not eliminate the need for an agreement, but it supplies the measurements an agreement needs to be fair.

Aligning incentives in the lease or a side agreement

Because the split incentive is fundamentally a contract problem, the durable fixes live in the lease or in a side agreement. Common approaches include:

• Language that lets a tenant participate in demand response, with the landlord's cooperation on any shared systems, and that defines how building-level payments are divided.
• A green-lease clause that shares both the costs and the benefits of energy actions, so the party who invests or acts is also the party who gains.
• An operational protocol specifying who adjusts which setpoints during an event, so that a called event does not depend on ad hoc coordination.

The goal in each case is to connect the party with control to the party with the financial stake, so that when an event is called, someone is both able and motivated to respond.

Turning it into a repeatable plan

Even a well-aligned lease benefits from a routine for actually responding when events occur. Knowing your controllable load, having a pre-agreed set of actions, and being ready when a peak or event window approaches turns demand response from a scramble into a process. Our resource on setting up a coincident-peak alert playbook describes how to build that readiness, and while it is framed around capacity peaks, the same discipline of anticipating high-stress hours and acting on a plan applies directly to tenant demand response.

The bottom line for tenants

For a commercial tenant in ComEd territory, demand response is less about the program mechanics and more about three practical realities: what load you control, how your space is metered, and whether your lease aligns the effort with the reward. Sort those out first. A tenant who understands its controllable load, has submetering or separate metering, and has a lease that shares the value is in a position to participate meaningfully. Without those, even a generous program has nowhere to take hold.

Sources

• ComEd
• PJM Interconnection
• Illinois Commerce Commission

This article is educational and does not promise any specific savings, rate, or outcome for any business.