Demand Response is an incentive program operated by the state in which all Utilities participate. The incentive program focuses on reducing demand during times when the Power Grid cannot handle the electricity demand: usually during a prolonged heat wave. It is much cheaper for the utility to pay end users for reduction in energy than it is to buy expensive power from Canada or construct Power Plants that only run 1% of the year.
The Demand Response Program is an insurance policy for the utilities, if they ever need to reduce demand they have a network, of customers/businesses that are willing to participate. Customers/businesses will still get paid for participation even if by chance we have a mild winter and the utility does not have to call a Demand Response Event.
The revenues are annually recurring and do not require any out of pocket investment from the customers/businesses.