Peak Load Management
As a consumer of electricity from the grid, you pay for both the actual energy you consume (the kilowatt hours) and the amount of energy that needs to be available to serve your account based on your peak load kW demand. Think of consumption like a car’s odometer, tracking the total amount of miles driven, and demand is like the speedometer, tracking the highest speed you’ve traveled at a particular point in time.
This peak kW, or peak load contribution / capacity tag / cap obligation (various names depending on market), can comprise up to 50% of your supply bill and more than 30% of your total electricity bill (supply + delivery). Through conscious management of your load, you can clip these peaks and significantly reduce your electricity costs, both in the current period (delivery) and during the next capacity period (supply).
Your peak load contribution is generally determined by your account’s contribution to the grid’s overall peak load. The actual calculations vary by ISO, explained further below, but what they have in common is that none of the utilities notify you of peak load hours ahead of time. With our predictive analytics platform, EnergyWatch can help you with peak load management by monitoring the grid’s consumption and weather in real-time and predicting when peak load hours are likely to occur. EnergyWatch will alert you with day-ahead and day-of email and text message alerts. Then you decide what actions to take to reduce load and save money!Unlike demand response, curtailment is entirely voluntary and there are no penalties for not performing.
How is my account’s peak load contribution calculated?
All calculations are backward looking, evaluating the highest or selection of highest peak hours from the prior period (typically summer).
NYISO – Your peak load contribution, or installed capacity tag (ICAP tag), is determined by your usage during the single highest peak hour from the previous year. The peak hour is the hour during which the usage was the highest across the entire NYISO grid (not just your zone or utility). Your ICAP tag is effective each May 1 to April 30.
PJM – PLC is based on your peak demand usage during PJM’s five Coincident Peak Hours during the previous June 1 through September 30 period. PLCs are effective each June 1 to May 31.
ISO-NE – Your peak load contribution, or installed capacity tag (ICAP tag), is determined by your usage during the single highest peak hour from the previous year. The peak hour is the hour during which the usage was the highest across the entire ISO-NE grid (not just your zone or utility). Your ICAP tag is effective each June 1 to May 31.