Reduce Overhead Costs Using Peak Shaving 

May 14, 2021

Reduce Overhead Costs Using Peak Shaving 

Discover how Environ can create a peak mitigation strategy for your business in New York

Peak energy usage can raise your monthly bills if you are not conscious about when you are using the most power. Creating a carefully crafted peak mitigation strategy can reduce the overhead costs of your business, lead to savings, and reduce your carbon footprint. Keep reading to learn how energy-efficient solutions and peak shaving will help you to reduce the overhead costs of your business in New York City, NY, and surround areas.

SEE ALSO: A Microgrid Will Protect Your Business from an Energy Crisis

What is a Capacity Tag (ICAP), and why is it important?

The Federal Energy Regulatory Commission (FERC) and the New York Independent System Operator (“NYISO”) ensures that enough generating capacity exists to meet peak demand and that the operation of the power grid will be reliable in the long term through “installed capacity requirements”. 

This requires all customers to secure a portion of the generation capacity of the power plants in their area, essentially paying generators to set aside the ability to produce energy during peak demand. Most customers do not always operate at their peak demand level. Hypothetically, if customers did use at peak demand and the generation plants had not set aside the ability to produce this energy, the grid would become unreliable, and prices could dramatically fluctuate. This is what occurred in ERCOT in Texas during the Month of February. 

This installed capacity requirement is meant to prevent this from occurring in the worst-case scenario. “Installed Capacity,” also called “ICAP,” is charged to each customer based on the highest peak hour on the NYISO grid during both the summer and winter seasons from May 1st to April 30th. If you are on a fixed price contract, this charge may be bundled into your rate. If you choose to reduce your energy during peak hours instead, you can significantly reduce that charge. That’s where peak shaving comes into play. 

How Peak Shaving Can Help

There are a variety of programs in the New York area that incentivize the control of peak demand. The NYISO Special Case Resources (SCR) Program pays participants to reduce electric consumption during the hottest summer day and the coldest winter days. How much energy or demand you need to take off the grid during that time is determined on a customer-by-customer basis. Your baseline is determined by looking at your power consumption during the hottest days throughout the prior Summer. Con Edison offers two programs, the Distribution Load Relief Program (DLRP) and the Commercial System Relief Program (CSRP). Both of these programs look at the trailing two weeks of energy consumption to determine your facility’s energy baseline. We partner with a variety of Demand Response Providers who can work with our team to install technology on your property to better monitor and manage energy use to take part in these programs. 

Along with the NYC-sponsored programs, you should reach out to a professional to develop a peak mitigation strategy for your property. Our team at Environ analyze both utility data and interval data to work with your team to develop an operational plan that seeks to lower your building’s peak demand. This will translate to savings on both your delivery and supply bills.

To work with us on your peak mitigation strategy, contact us by calling (800) 375-1457 or filling out our contact form to get in touch with us. We would love to work with you!