Energy efficiency and demand response have a long history in California and are already contributing to lower costs and reduced environmental impacts. Utility demand response programs developed over a decade ago have offset the need for additional peaking generation. Implementing new, more flexible and responsive resources will further advance California’s goals of a more reliable and cleaner power system—with the added potential of replacing or deferring investments in more expensive energy infrastructure. From an operational perspective, demand response resources will contribute to the low-carbon flexible capacity needed to maintain real-time system balance and reliability while also supporting the integration of increasing levels of renewable energy resources. As the main grid operator of a state leading the way to a greener grid and as a facilitator of the only open-market in the western United States, the ISO is keenly involved in leveraging alternative resources to the benefit of an efficient and reliable system. Anticipating the magnitude, type, timing and geographic distribution of these rapidly growing resources is as critical as solving the challenges of short-term and long-term forecasting of load variability as large numbers of resources inject energy into literally thousands of locations on the grid. The ISO is preparing for the challenges because the environmental and sustainability benefits are enormous. We also believe the new resources can be blended into the current grid composition without compromising reliability. We have a lot to look forward to in terms of positive benefits to California’s economy and environment as long as this historic grid transition is managed thoughtfully and proactively through the coordinated efforts of all stakeholders.