Constellation NewEnergy has launched Constellation Peak Response, a program that allows Constellation commercial and industrial electricity supply customers to reduce future capacity and transmission costs by lowering electricity consumption during the hours of peak demand.
Since the program’s pilot began in April 2011, more than 100 customers have enrolled a total of 400 MW into the program. In 2012, these pilot customers received more than $500,000 in Peak Response payments and savings as a result of their lower electricity consumption during alert hours.
Capacity and transmission charges vary by region and typically account for 20 percent to 30 percent of a commercial customer’s overall electricity bill. Capacity charges ensure there is an adequate excess supply of electricity to meet the highest levels of grid demand, while transmission charges cover the cost of transmitting energy over the grid from a generating facility to local utility distribution facilities.
In most regions, these charges are based on several hours each year when the grid is at its highest level of demand. Peak Response predicts the peak grid hours and sends day-ahead and day-of notifications, alerting customers to reduce electricity consumption. The benefit to customers is realized the following year when the regional grid operators and local utilities determine the customer’s share of capacity and transmission charges based on electricity consumed during peak grid hours.
Participation in the Constellation Peak Response program is voluntary and there is no penalty for failure to comply when a load response event occurs, providing a low-risk opportunity for customers to save on their overall electricity costs.
Constellation Peak Response offers customers two payment options – saving on their Constellation monthly bill or receiving a quarterly check – during the year following their participation in the program.
Peak Response is currently available to Constellation commercial and industrial power customers in the PJM, New England, New York and ERCOT regions.