Your all-in electric supply price is comprised of several specific costs. The largest component of the pie is wholesale energy (the actual cost of generating electrons).  The second-largest component of your electricity price is capacity; these two components add up to more than 85% of your electricity supply price.  Capacity is a cost levied by the Independent System Operator (ISO) to maintain the reliability of energy supply and ensure that the necessary generation is available during peak demand events across the grid. These peak demand days typically occur during the afternoon of a hot summer weekday where C&I end-users require excess air conditioning to cool their facilities. These peak days impact future pricing for all electric consumers.

For the first time in New York (NYISO), the summer of 2019 established a peak day that occurred on a Saturday (7/20/19). As future capacity tags are set based upon prior summers peak day, it’s likely that many NY businesses will have an artificially low capacity tag going forward as many organizations are not running at full production capabilities on weekends. For example, NYC commercial real estate customers will see a drop in capacity tag year over year of roughly 30%. If your organization is currently in capacity pass through the contract, you should see a reduction in cost beginning May 2020.

This presents a unique opportunity for many retail electric consumers throughout the state of NY to take advantage of a lower capacity tag. Reach out to an Atlas Energy Advisor to learn more about how to take advantage of this opportunity and how to better manage your future capacity tag and relevant costs.

To learn more about energy management solutions, contact Max at max.stewart@atlasretailenergy.com.

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