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How Gift Cards Keep the Lights On When Power Is Short

Power lines in Los Angeles, California, on Sept. 1.

Power lines in Los Angeles, California, on Sept. 1.

Photographer: Eric Thayer/Bloomberg

When extreme heat or bitter cold threaten to overwhelm fragile power grids in places like California and Texas, there’s an effective, old-school tool to avoid a shortfall: turn the lights off. But how to make that happen? The key may be “demand response” -- voluntary conservation programs that kick in during critical hours. In many cases, civic-minded citizens are doing their part, simply opting not to use appliances when the grid is most stressed. But others are being enticed with big financial carrots -- as well as gift cards

It’s an umbrella term for a variety of short-term, voluntary efforts that encourage homes and businesses to reduce electricity during hours when grid operators fret power supplies may not meet heavy demand. Getting consumers to switch off is a critical tool for helping California avoid blackouts during a mounting heat wave this week, as temperatures soared above 110 degrees Fahrenheit (43 degrees Celsius) in some regions. It’s also sometimes called “power shaving,” and can, in a way, be considered a form of rationing.