Peak Load Management
Cut your energy capacity costs by predicting when peak demand hours will occur and adjust usage accordingly.
Did you know that 20 percent or more of industrial and institutional customers’ energy capacity costs are determined by decisions made during just a few hours a year? Each year, utilities and power pools review customer energy usage patterns during the peak hours of system-wide demand. They use this information to determine price premiums and other charges that are ultimately applied to every hour of energy usage in the following year.
Usource works with you to predict when these peak demand hours will occur. By making targeted adjustments to energy usage during these hours, you can significantly reduce costs.
What are capacity costs?
Your total electricity charge is made up of several individual costs: some controllable, others not. On your utility bill, you will notice a utility distribution charge and a supplier charge. The distribution charge paid to your utility accounts for roughly 25 percent of your total electricity cost and cannot be changed. The remaining 75 percent, your supplier charge, includes cost components, such as the actual generation cost of the electricity, capacity, transmission, and other smaller charges.
The capacity charge is one cost that can be affected with proper management. Your capacity charge is made up of two main components: capacity cost and capacity tag.
- Capacity cost: The generation price set per kilowatt-hour
- Capacity tag: The total kilowatt-hours used by a facility on the peak hour(s) of the peak day(s)
What you use this year on the peak day(s) will become your future capacity assignment. Your capacity assignment will impact your energy costs for the following year.
Companies will pay higher costs for capacity in the near future, but there are ways to mitigate the full costs of these escalations through a peak load management program.
Contact Us to discuss a load management program that’s right for you.
Read about rising capacity costs in the New England region.