For the last three years, Virginia state and local government agencies have been participating in a demand response program that pays them money to reduce their energy use during times of peak electricity demand. Last year, the program generated nearly $3.2 million total for 75 participating state and local agencies.

In September 2007, the Virginia Department of Mines, Minerals and Energy (DMME) contracted with Campbell, Calif.-based EnergyConnect to offer integrated demand response services on a performance basis with no set up costs to the state. The company coordinates with Valley Forge, Pa.-based PJM....