How your Texas business uses electricity this summer will impact your bill for the next year.
If you have a demand meter, your peak demand charges for the next calendar year will be established during the grid’s highest demand days in a 4 month period. That’s known as your 4 coincident peaks, or 4CP.
In this article, we’ll explain what 4CP is and how it impacts your business. Then we’ll give you tips on how to lower your demand charges based on this knowledge.
How is Peak Demand Set for My Business?
Your peak demand is based on your electricity usage during the four coincident peaks (4CP) each summer in Texas.
A coincident peak demand interval is the 15-minute time period when power requirements on the grid hit their highest level during a particular month. The Electricity Reliability Council of Texas (ERCOT) establishes 4 coincident peak (4CP) demand intervals, one for each summer month June – September.
Your transmission and distribution service provider (TDSP) then uses your kW demand during this interval to set your peak demand charges for the following calendar year.
You’ll pay demand charges each month based on either your actual demand or your peak demand, whichever is greater.
If you reduce your demand during these specific periods, you could save on your demand charges. But it’s hard to know when a 4CP day will happen.
Will Today Be a 4CP Day in Texas?
Peak demand days aren’t pre-set. It’s all measured looking back to see what the highest usage interval was. However, there are plenty of resources that predict high demand days.
- Ask your electricity provider if they have a 4CP forecast email or alert system for high electricity demand days.
- Subscribe to ERCOT demand alerts
- Follow ERCOT on social media, including Twitter, Facebook or LinkedIn
TIP: 4CP intervals typically occur on weekdays between 3pm and 6pm. Lowering usage in the afternoon on predicted high demand days may help lower your peak demand.
How to Lower Your Demand Charges
You need to keep your business operating continuously. But there are still changes in your operation that can help reduce peak demand between 3pm and 6pm.
- Pre-cool your building in the early afternoon; then adjust the thermostat up 4-5 degrees during the peak demand period
- Turn off unnecessary lights and office equipment (printer, copier, coffee machine, televisions)
- Turn off pumps, air compressors or other high-demand equipment
- Avoid shift changes or simultaneous equipment start-up during peak demand hours.
- Reduce the amount of equipment running at the same time. If you use heavy machinery in your business, consider a staged start-up. Turn on one piece of equipment at a time (maybe one every 20 minutes).
- Consider getting an HVAC tune-up or upgrading your HVAC systems to ensure energy efficiency.
- Use automation to adjust lighting and HVAC based on occupancy.
You can also use data to assess your business’s energy consumption patterns. Then distribute energy consumption more evenly to lower peaks.
To do this, create an account with SmartMeterTexas and download last year’s usage in 15-minute intervals. Focus on your power usage in June to September, especially usage from 3-7pm, and make note of what’s operating at that time. Then get your employees involved in energy savings at your business.
Resetting Your Meter Load Factor – Move-In
If you are moving in to a new facility, you don’t have to “inherit” the previous occupant’s peak load measurement.
- If you are starting a new business and moving in to the facility, make sure you request a move-in when you start service. That will reset your peak demand calculation.
- If you are building out a new space, make sure construction is being done with a temp meter in place. Then request a move-in for new service when the TDU installs the permanent meter. That will ensure your peak demand is based on your actual usage pattern.
- Stagger the testing or operation of any equipment (HVAC/motors/pumps) if you’re moving locations during the summer months. If you test or use all your equipment at one time, this may re-set your peak demand for the entire year.
You can find out more about demand charges in our article on that topic.
