In competitive electric markets such as New England, New York and PJM, the Independent System Operator is responsible for paying generators for their capacity to perform during critical hours. Simply, electric generators are paid to guarantee that there will be enough electric supply available to meet forecasted demand requirements into the future. These costs are pre-determined using competitive auctions. While the actual cost of the capacity is determined system-wide, your individual capacity tag is established by your electricity demand when the system is peaking . A consumer’s capacity tag is tied to the number of capacity units that the consumer will require on the peak demand day(s) of the year.

  • Capacity cost: The auction clearing price set per kilowatt-hour (uncontrollable)
  • Capacity tag: The demand used by a facility during the peak hour(s) of the peak day(s)

By effectively predicting the potential peak day(s), consumers can reduce their electricity usage to lower their capacity tag for the next capacity year. A reduction in the capacity tag will help mitigate the increase in the capacity costs going forward.

Historical Peak Days – 2016

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 in future years.

Contact your energy adviser for additional information, or complete the form at right to request a Usource Capacity Tag and Cost Analysis.

Helpful links:

ISO-New England

New York ISO

PJM Interconnection

PJM Capacity Performance

Capacity Tag Analysis Request

About Usource

Usource, based in Hampton, NH, helps clients manage, control, monitor, and reduce electricity and natural gas costs as their trusted energy advisor. Founded in 1999, Usource is highly sought after for its expertise in navigating the complexities of deregulated energy commodities markets. Learn More