Your all-in electric supply price is comprised of several specific costs. The largest piece of the pie is wholesale energy or the actual cost of generation, while the next biggest cost center is known as capacity. Capacity is a cost levied by the Independent System Operator (ISO) to maintain reliability of energy supply and ensure that 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.
In New England, the ‘Capacity Year’ runs from June – May. During this period, accounts are assigned a ‘Capacity Tag’ that indicates the amount of energy an account is consuming during the coincident peak across the grid. Atlas Retail Energy works with clients to mitigate future costs associated with capacity by actively monitoring forecasted ISO demand data and advising clients to curtail energy demand during expected peak events. This past month was the warmest June on record, and as such, Atlas Retail Energy sent ‘Peak Day Alerts’ to New England based clients providing notice of potential impacts.
During the summer of 2020, the peak occurred on July 7th, when energy demand reached 24,695 MW. In 2021, New England demand has already eclipsed last year’s level twice. On Wednesday, June 30 this year, demand hit 24,759 and the highest peak to date was established on Tuesday, June 29 at 25,101 MW.
Atlas Retail Energy will continue to monitor demand across all ISO regions and to assist clients who have a desire to actively manage their capacity tag obligations. Please reach out to an Atlas Advisor today if you would like to discuss the impacts that capacity tag management could have on your organization’s overall energy budget and management strategy. Don’t wait another day to start saving on your energy bills.