Reduce electricity costs on summer peak demand days

May 26, 2017

You can greatly benefit from reducing energy consumption on the five days of the year when the highest demand on the electricity grid occurs. Peak demand typically arises in afternoon hours during summer months. NOAA predicts that much of the United States will experience higher-than-normal temperatures this summer, which would suggest increased demand. Usage can be reduced by dimming lighting, adjusting thermostat settings, shutting down equipment, using onsite power generators, or scheduling operations during nighttime hours.

Peak Demand

Many electricity utility companies notify local news outlets on days when peak demand is likely to occur, prompting the media to encourage consumers to reduce usage during peak demand hours. In some regions, customers can subscribe to alerts that notify them to reduce consumption during specific peak demand timeframes. Utility websites and local news websites, as well as grid system websites, such as the PJM webpage, are good resources to check for notifications. 

Peak demand days in PJM

Chart displaying the top ten peak demand days in PJM. Note that the vast majority are in mid/late July.

Additionally, consumers can enroll in Demand Response programs to receive payments for agreeing to voluntarily reduce consumption when notified. Demand Response programs are beneficial because customers are alerted when the five peak demand days each year are likely to occur, enabling them to relieve the grid and receive payments.

Capacity Costs

Electric utility companies measure and average each customer’s energy demand in kilowatts on the five highest demand days of each year. That average, known as peak load contribution (PLC), can be reduced and managed through best practices. Electric utilities and suppliers use each customer’s PLC, or “installed capacity tag,” from the prior year to calculate monthly capacity costs, which appear as a line item on customer electricity bills. Your peak load contribution in 2017 will determine your monthly capacity costs in 2018.

Customers should review their bills and be able to identify their PLCs at a glance. The PLC may be listed as “demand charge” or “billed load KW” on some customer bills. If you have any questions regarding your PLC or energy bill, contact the APPI Energy customer service team for a courtesy evaluation at 800-520-6685.