Each summer, end users receive "peak day" alerts warning of hours when electricity demand may reach its highest point of the year. These hours directly affect your future electricity costs because your usage during them determines capacity or transmission charges for the following year.
But predicting peaks is no longer straightforward. Behind-the-meter solar, energy efficiency, and demand response programs are flattening demand curves. As a result, grid operators often overestimate peak load. The outcome is more alerts, more uncertainty, and greater pressure on end users to respond correctly.
Chart: PJM Peak Demand Days Jun-2024 - Jul-2025
Why Peak Days Matter
- In PJM, ISO-NE, and NYISO, your usage during specific peak hours sets your capacity obligation for the next year. If you can reduce your load during these hours, you will lower your future costs.
- In ERCOT, peak days are tied to transmission charges, not a capacity tag. Usage during the system’s four coincident peaks (4CP) in June through September directly impacts future transmission costs.
How Each Market Measures Peaks
PJM: Your capacity tag is based on your average usage during the five highest grid-demand hours, each on a different day between June and September.
ISO-NE: Your capacity requirement is set by the single highest system-demand hour during June through September.
NYISO: Your capacity tag (often call an ICAP obligation) comes from the single highest system-demand hour between July and August.
ERCOT: The highest 15-minute interval in each of the four summer months (June through September) determines transmission charges for customers over 700 kW.
Why Are You Getting So Many Peak Alerts?
It is harder to call the exact peak in advance. Distributed generation, energy efficiency, and active demand response programs can lower actual demand unexpectedly. Since missing the true peak can be costly, we send more precautionary alerts than in the past. At the same time, we do our best to minimize unnecessary noise, so you receive only the most relevant guidance to protect against added costs without disrupting operations more than necessary.
This means you might see 8–15 alerts in a single summer even though only a few hours ultimately matter.
How To Respond Strategically
- Stay focused: Peak days almost always occur on hot, humid weekdays between 3–6 p.m.
- Rely on our tracking: At Stanwich, we monitor grid and load data on your behalf so you can act with confidence when system demand is most likely to set a peak.
- Be ready to act: Automate curtailment plans where possible so you can respond consistently.
- Learn from the past: Reviewing how your prior tags were set will help refine your approach and avoid unnecessary operational disruption.
You don’t have to hit every alert perfectly to manage costs. While we encourage clients to respond to all alerts we send, the real impact comes from how your performance is measured on the final, declared peak day. Staying prepared and responding consistently helps ensure you’re positioned to lower your capacity and transmission charges when it matters most.
For additional information please contact us to schedule a quick call.