Peak Alerts: What they Mean & How to Benefit from Them  

As summer heat waves roll through, organizations can expect to receive peak alerts, either from our team here at APPI Energy, or from your electricity supplier or local utility. While no one can know which days or hours will end up setting peak demand levels for the year, reducing your demand can help lower energy costs by lowering your peak load contribution (PLC) tags.

Key takeaway: You can greatly benefit from reducing energy consumption on the peak days or hours of the year when the highest demand on the electricity grid occurs. By reducing energy consumption during those times, you can have an impact on your monthly electricity expenses for the following year.  

Capacity Costs

Electric utility companies measure and average each customer’s energy demand in kilowatts on the highest demand hours and days of each year. That average, known as your peak load contribution (PLC), can be reduced and managed through best practices. PLC tags are used by the utility and competitive suppliers to help determine the cost to serve your account, impacting both the supply and delivery sides of your electricity bill. In those markets that include a capacity market, electric utilities and suppliers use each customer’s PLC, or “installed capacity tag,” from the prior year to calculate monthly capacity costs, which can often amount to 10-25% of your total electricity supply charge. Your peak load contribution in 2021 will determine your monthly capacity costs in 2022.

What You Can Do

Peak demand typically arises in afternoon hours, during summer months. Usage and demand can be reduced by dimming lighting, adjusting thermostat settings, shutting down equipment, using onsite power generators, or scheduling operations during nighttime hours. Additionally, we have a number of services available that are designed to help businesses utilize data-driven solutions to reduce and manage energy expenses. Services such as demand response, renewable energy procurement, and utility management systems are ideal for businesses that seek efficient solutions to summer’s peak demand conditions.

Key factors to consider are:

  • Understanding when & how you use power
  • Spreading out energy intensive processes
  • Considering programmable AC/heating controls
  • Opting for motion activated lighting

As well as:

  • Peak shaving using storage or alternative energy sources
  • Point of use monitoring devices
  • Demand response programs

It's also worth making note of peak alerts as they come your way either from your dedicated APPI consultant, media outlets, or your supplier so that you can make smart, timely decisions on curtailing your energy usage.

To continue the conversation as it pertains to your organization, schedule a no-cost, no-obligation complimentary assessment with our team. Reach out to us here online via chat, by email at or by phone at 800-520-6685.