As a commercial and industrial electricity user, are you aware of the concept of “chasing the peak?”
As the modern grid becomes increasingly complex and multifaceted, more and more system operators and utilities are charging for electricity, based on the organization’s overall share of the power system’s peak demand. It’s becoming increasingly difficult for organizations to ignore these costs, and now is the time to take action to minimize them by monitoring forecasted peak periods. By adjusting your energy use during peak demand periods, it is possible to significantly reduce your organization’s electricity spend. Many system operators and utilities across North America offer programs to avoid these charges – are you aware of the benefits of chasing the peak?
What is Chasing the Peak and why does it Matter?
Chasing the peak involves keeping a close watch on peak demand and usage forecasts provided by system operators and utilities, then taking advantage of time-of-use pricing. For example, system operators like PJM Interconnection in the U.S. and Independent Electricity System Operator in Ontario charge Class A customers (large-scale electricity users) based on coincident peaks. Users’ monthly rates are determined by their share of the peak power demand during the five separate hours throughout the year when the total system demand is the greatest. Additionally, many utilities have similar critical peak pricing (CPP) tariffs. By being aware of these peak hours and managing the electricity usage of on-site loads, organizations in these regions can avoid high charges and cut overall energy costs.
The concept of chasing the peak is a win-win; electricity customers cut costs and the power system benefits as well. Stress on the grid during peak demand is relieved, improving reliability and efficiency.
Reduce Your Energy Costs Today
Clearly, there is value in chasing the peak. Today’s electricity prices can get high, so any cutback in costs is a step in the right direction. Taking the initiative to monitor and shift peak demand and energy consumption puts your organization in a better financial position, easily reducing energy costs in a straightforward way. Find out how your utility or system operator charges for your contribution to peak demand and see if there is an opportunity to cut costs. Consider using alternative energy sources wherever possible during potential peak hours. Get fully informed about the advantages of chasing the peak, start thinking outside of the box and save your organization money today.
See below for a few North American system operators and utilities that offer programs to reduce peak demand charges:
• Global Adjustment (GA), offered by the IESO (Ontario)
• Peak Load Contribution (PLC), offered by Baltimore Gas & Electric, a local distribution company within PJM Interconnection’s service territory (covering all or part of thirteen states and the District of Columbia)
• Critical Peak Pricing (CPP), offered by San Diego Gas & Electric
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