Your capacity tag determines how much you’re charged for capacity on your electricity bill. The good news? With strategic planning and operational flexibility, it’s possible to lower your PLC and substantially reduce your capacity-related charges.
Here are five effective ways to reduce your capacity tag in PJM:
1. Monitor PJM Peak Load Forecasts in Real Time
The first step in managing your PLC is knowing when a system peak is likely to occur. PJM determines your tag based on your facility’s electricity demand during the five highest-demand hours of the year, known as the “5CP” (Coincident Peak) hours.
By working with a partner like Comfort Profit Consulting or using forecasting tools, businesses can stay informed about day-ahead and day-of peak alerts, temperature and demand thresholds that trigger PJM events, and historical trends and system conditions. Identifying potential peak days in advance gives you the opportunity to reduce load when it matters most.
2. Implement Load Curtailment During Peak Events
Once a potential peak event is forecasted, your next move is to reduce your demand during that hour. Common curtailment strategies include dimming or cycling off non-critical lighting, temporarily shutting down high-consumption production equipment, adjusting HVAC or refrigeration loads, and rescheduling processes to off-peak times.
Even a 15-30% load drop during a forecasted peak hour can make a meaningful difference in your capacity tag. The result? Lower capacity charges for the entire following year.
3. Use Onsite Generation or Storage Assets Strategically
If you have backup generators, cogeneration systems, or battery storage, you can dispatch these resources during predicted peak periods to offset grid demand and reduce your measured load.
This practice, sometimes referred to as “peak shaving”,can significantly lower your PLC without disrupting operations. Battery storage systems in particular can be charged during low-demand hours and discharged to supply part of your facility’s load during the 5CP windows. Comfort Profit can help you develop a dispatch plan to maximize the economic value of these assets.
4. Enroll in Demand Response Programs
PJM and third-party providers offer demand response programs that not only encourage you to reduce load during peak grid conditions, but also pay you to do it.
By enrolling in these programs, your business can earn capacity revenue for committed curtailment, reduce exposure to real-time energy market spikes, and align load reductions with peak shaving strategies. This dual benefit, offsetting costs and creating revenue,makes demand response a smart addition to any capacity mitigation plan.
5. Audit and Optimize Operational Schedules
Sometimes reducing your PLC doesn’t require investing in new technology. It just requires smart scheduling.
By analyzing your equipment run schedules, shift patterns, and seasonal processes, Comfort Profit can help you identify which loads contribute most to your peak demand, adjust timing to shift usage outside of likely 5CP hours, and develop standard operating procedures for peak days. For example, staggering motor startups or delaying non-essential loads by even one hour can help you avoid contributing to a system peak, and save thousands annually in capacity charges.
Final Thoughts: Take Control Before the Next Peak Season
The recent PJM capacity market changes have made it clear: capacity costs are no longer minor line items. They’re major budget drivers. Fortunately, large energy users don’t have to be passive price takers.
By implementing strategic peak shaving tactics and working with an expert partner like Comfort Profit Consulting, your business can proactively manage exposure, control costs, and build long-term energy resilience.
Want to know how much you could save? Contact Comfort Profit Consulting today for a free capacity exposure assessment and let us help you reduce your capacity tag before the next peak season hits.
(570) 336-0197
comfortprofit@gmail.com
