EnerNOC has been gobbling up deals across New England to provide energy management to state and city governments. Now, the Boston-based company has secured a multi-year contract to provide Tucson Electric Power with up to 40 megawatts of demand response capacity, pending regulatory approval.

“EnerNOC is proud to announce Tucson Electric Power as our newest utility partner,” Tim Healy, EnerNOC’s Chairman and CEO, said in a statement.  “By offering demand response to its customers, TEP and EnerNOC are helping to ensure a cost-effective, clean, and reliable supply of electricity.”

Tucson Electric Power will use EnerNOC's DemandSMART application to manage commercial, institutional, and industrial facilities throughout its service territory. When the utility needs to reduce its power load, EnerNOC will pay customers to reduce their electricity usage and they will be able to access DemandSMART to look for additional energy savings.

The utility is projecting 2,500 megawatts of peak demand in its territory this summer, so the agreement to have EnerNOC manage 40 megawatts of demand response is still only a fraction compared to what some other utilities and states are doing. 

In Pennsylvania, for instance, Act 129 has practically made demand response mandatory in the state, calling for a 4.5 percent reduction in peak use by 2013. As states mandate peak energy savings, demand response companies like EnerNOC and Comverge are sure to see even more opportunities for growth.

Additionally, a recent survey of smart grid industry leaders from over 50 North American utilities conducted by GTM Research found that 71 percent identified reduction in peak demand as one of the top benefits of smart grid technologies.

While EnerNOC's stronghold is in New England, it also has agreements with PJM Interconnection, Idaho Power, Tennessee Valley Authority, Southern California Edison, Pacific Gas and Electric, Tampa Electric Company, Salt River Project, Public Service Company of New Mexico, and Xcel Energy.

Expect to see that list continue to grow.