The fastest and most cost-effective way to ensure adequate resources and create space for new load growth is to make better use of existing resources. In Arizona, pool pumps can play a significant role.

Demand response programs have proven they can shift electricity usage away from peak times, thereby deferring or avoiding the need for new assets to meet system peak demand. By leveraging customer-owned generation, storage, and load control devices, these programs can defer billions of dollars in centralized generation upgrades. These distributed assets can be aggregated and coordinated as virtual power plants to defer or replace the construction of large-scale generation facilities.

Load Growth Meets Construction Bottlenecks

U.S. load growth is accelerating due to large-scale demands such as data centers and numerous distributed small-scale demands like electric vehicles. The U.S. Energy Information Administration estimates thatthe U.S. will need an additional 200 gigawatts of effective capacity by 2030, but only half of that capacity is planned to come online. We simply cannot build fast enough.

Policy mechanisms and investments have focused primarily on transmission, storage, and centralized generation, but supply chain shortages and permitting issues have slowed progress. Policymakers and utilities should place greater emphasis on expanding demand response programs as a faster, more cost-effective path to meeting load growth and resource adequacy requirements.

Emerging Rate Structures Create New Opportunities

In the sunny U.S. Southwest, some utilities have introduced"super off-peak" periods, offeringsignificantly reduced ratesduringpeak solar generation hours. In Arizona,Salt River Projectlaunched its E-28 residential rate plan in November 2025, designating 8 a.m. to 3 p.m. as super off-peak hours. By offering rates more than 50% lower than other rate plans, this plan encourages customers to shift electricity use to the midday hours when solar energy is abundant, providing both cost savings and environmental benefits.Arizona Public Servicealso offers similar plans.

The nationwide push to lower daytime electricity rates is driven by negative wholesale prices—when supply exceeds demand, generators are forced to bid below zero to keep running or to capture production tax credits. This phenomenon is particularly pronounced in Texas, parts of Kansas and Oklahoma, and California, where transmission constraints and high penetrations of wind and solar lead tofrequent negative prices. This creates an opportunity to absorb cheap energy by shifting demand.

The Demand Response Potential of Pool Pumps

In Arizona alone, pool pumps offer a gigawatt-scale demand response opportunity. Pool pumps typically run at night and can be automated through demand response programs or manually programmed to run during the day. Spending 30 seconds to update a pump's schedule can save homeowners over $100 per year.

How significant is the impact of pool pumps on peak demand? Overall, the shift is substantial: Arizona has approximately505,000 residential pools. By cross-referencing census data with utility service territories, we estimate the distribution among companies: APS has 186,850 pools; SRP has 207,050; Tucson Electric Power has 67,000; and the remainder is spread across smaller utilities statewide.

Take SRP and APS, for example—both have low daytime rate structures. Assuming asingle-speedpool pump with 1 to 1.5 horsepower running an average of four hours, shifting pump operation from night to midday super off-peak hours could shift 3,280 megawatt-hours of electricity per day across these territories, with peak demand shifted by up to 820 megawatts—equivalent to an entire power plant, just from pool pumps.

Figure 1 shows data examples from two single-family homes on APS's super off-peak rate (10 a.m. to 3 p.m.), one with solar and one without. Shifting pool pump operation to the daytime also reduces the amount of solar PV energy fed back to the utility when generation exceeds household load.

Chart showing load profiles for a home with a pool pump and a home with a pool pump and solar panels.
Used with permission from the Laboratory for Energy and Power Solutions at Arizona State University

Aggregate Economic Benefits Are Significant

The financial savings from aggregation are substantial. For APS customers, shifting pool pump operation toAPS super off-peakhours could save customers $25 million per year, or about $134 per pool owner. For SRP customers, the potential savings are even greater: shifting toSRP super off-peakhours could save customers $58 million per year, or about $283 per pool owner. Combined, that's $83 million per year in savings for ratepayers—savings that policymakers need to help enable and incentivize.

Gigawatt-scale load-shifting opportunities can grow through policy and proven business models. The U.S. virtual power plant market is no longer in its pilot phase—it is maturing rapidly, with more than500 virtual power plants。

Reducing peak demand through demand response and virtual power plants buys time for a grid buildout that has been slowed by equipment procurement delays. This is especially important because large loads such as hyperscale data centers and advanced manufacturing labs are expected to add4.5 gigawatts of demand in APS's territory by 2030。

Brattle Group's latest demand growth outlook warns that these facilities are being sited faster than new generation or transmission can be financed, permitted, and built, with even "fast-track" projects stretching to three-to-five-year timelines. Expanding the flexible load portfolio is the fastest and often lowest-cost option for maintaining resource adequacy in the near term. FERC Order No. 2223 provides the authorization and opportunity. Every gigawatt we shave from peak demand defers or avoids peaker plants and billions in transmission upgrades.

Pool pumps are a near-term example of avoiding capital expenditures through bring-your-own-device programs.APSstates that bring-your-own-device can avoid capacity costs of $80 per kilowatt per year;the Arizona Solar Energy Industries Associationvalues avoided capacity costs higher, at$200 per kilowatt per year. Although SRP is not a regulated utility, it operates on the same regional grid, and for this example, its capacity costs are likely similar.

Whatever the specific avoided capacity cost value, when applied to the 820 megawatts of pool pumps in APS and SRP territories, the aggregate amount is substantial. This equates to avoiding $66 million to $164 million in capacity costs annually, savings that could be passed directly to ratepayers. These costs would otherwise go toward fast-start gas turbines, battery storage, or transmission upgrades. By shaving peak demand, we can improve reserve margins during a decade when supply chain constraints make it increasingly difficult to put "new steel in the ground."

Regulators and utilities must move forward with modernization toward automated load management. Setting the state's 500,000 pool pumps to run by default during midday solar peak hours would treat them as demand response resources. This "set-and-forget" shift could defer up to $164 million in infrastructure costs annually, providing an easily achievable solution to the capacity gap.