The world is experiencing climate changes characterized by global warming, and energy conservation policies that can reduce greenhouse gas emissions are attracting increasing attention. Heating is one of the most important factors that contribute to the peak load of power consumption throughout the year. Incentive-based electricity demand response (EDR) policies can serve as an important regulation tool during energy system operations, especially in countries with a regulated power market like China. However, whether people will sacrifice comfort to respond to such a policy during hot spells or not and what will the impact be on vulnerable groups, are still unclear. To answer these questions, large-scale EDR trials involving more than 150,000 households were conducted in southwestern China during continuous extreme high temperatures. Households’ 15-min electricity consumption data, hourly meteorological data, and matched survey data were integrated to estimate the regulatory effect of this EDR policy and the discrepancies in response behaviors among urban and rural households, as well as households with children and the elderly. We found that this incentive based EDR policy is similar with price based policy, which can effectively reduce the peak load, however with little adverse effect on vulnerable groups. Temperature rise during a hot spell will slightly decrease the reduction effect. The energy-saving potential for urban households was higher than that of rural households. Households with children did not respond to the EDR policy, while the elderly response proved to be more positive during a hot spell. In addition, repeated and frequent implementation of this policy did not result in attenuation of the regulatory effect on power consumption. This is one of the few energy conservation options will have undergone multiple trials before promotion on a large scale in China, and the results can serve as a reference for countries with similar regulated power markets. Although, no direct harm is done to vulnerable groups, before deploy it nationwide, vulnerable groups still need to be considered to avoid exacerbating existing energy injustices or creating new energy injustices through transfer payment.