“Peak.” The word doesn’t exactly instill feelings of comfort when it comes to your energy bill, does it? Typically, “peak” is associated with subsequent consequences like “peak usage” and “peak costs” and “peak expense.” However, a 4CP Avoidance Strategy may be the trick to maximizing your use of renewable energy and reducing your costs during the hottest time of the year.
By working with a trusted energy advisor, commercial energy consumers can take advantage of 4CP alerts, shed load (aka “peak shave”), and lower demand when peaks are recorded.
Here’s what you need to know about 4CP and how to maximize your benefit during the highest-stress period of the energy calendar.
What is 4CP?
Four Coincident Peak, otherwise known as 4CP, is a program that allows commercial business participants to voluntarily reduce their energy consumption during the 15-minute intervals in the highest-demand part of the year: June, July, August, and September when ERCOT is likely to record peak events.
The voluntary program lets you reduce charges from your TDSP (transmission distribution service provider) by reducing electricity usage during peak events throughout the summer. The result is a significant reduction in energy expenses, which can lead to major sighs of relief for bill payers.
During the summer months, The Electric Reliability Council of Texas (ERCOT) measures four coincidental peaks. The energy usage measured at those peak times will be a key factor in determining your TDSP charges for the following year.
As you can imagine, if the peak measurements are exceptionally high (like on a day when Texas’s notorious weather reaches into the triple digits) your rates may be locked in at above-average costs for a year after the fact!
Those who ignore 4CP or simply chalk the summer month’s sky-high expenses up to an unavoidable cost are missing out on serious savings opportunities.
What is 4CP Avoidance?
Four Coincident Peak avoidance is the act of reducing energy consumption during specific time periods in the summer in order to reduce costs of transmission charges. Participants in the 4CP program often have a strategy to limit their energy use during these time periods.
Understanding 4CP charges is a material method to cutting energy costs. Strategically reducing your energy load during the time at which 4CP is measured will create a lower multiplier for the transmission cost recovery factor (TCRF), which directly impacts your transmission distribution service-related charges on your bills (also referred to as demand charges). The key is to know the right days and the right times on those right days to make the cut.
An avoidance strategy makes use of 4CP alerts. A trusted energy advisor will have access to these alerts and help create a strategy that helps you gauge the best time to curtail consumption.
According to the Frontier Association, “A consumer that can reduce its demand for electricity by 1 MW during each of the four CPs can save about $25,000 in transmission charges the following year… This potential avoidance of transmission charges provides a strong incentive for industrial energy consumers with some flexibility in their operations to engage in ‘4CP chasing.'”
How to Reduce Consumption During 4CP?
Most businesses assume that there’s no way to reduce their energy consumption. Energy-conscious businesses in particular may believe that they’ve already implemented as many cost-cutting strategies as they can.
However, there are numerous creative ways to lower energy usage at the most opportune moment that cost far less than the charges you’ll accrue if you ignore the opportunity for a 4CP Avoidance Strategy.
There are countless strategies you can use, including:
- Reducing non-essential lighting
- Modifying manufacturing processes
- Alter scheduled maintenance periods
- Coordinate shift changes
- Adjusting HVAC equipment
- Dialing back pumps
- Changing settings in industrial freezers
- Reduce or halt use of non-critical loads
- Automated response solutions
There’s no one-size-fits-all when it comes to finding the ideal way to take advantage of 4CP alerts, so consider which operations are placing the biggest demand on your energy consumption and think outside the box to make the smartest play for your business.
How Can Renewable Energy Help During 4CP?
Additionally, if you want to take advantage of going solar and maximizing your solar investment tax credit, now may be a perfect time. Using renewable energy to offset your energy use during 4CP can be the ideal win-win strategy for many businesses. The nature of solar energy inherently creates a “peak-shaving” effect since a solar array is producing at its max on sunny (and likely HOT!) afternoons when the grid is peaking. This means, your business is drawing less energy from the grid through these critical time frames.
Not only will you cash in on the maximum Federal ITC in 2019, but also you’ll save for the entire year to come by reducing your usage during the peak measurements from June through September.
All of these methods – and others that can be customized for your business – can have a dramatic effect on energy consumption without hindering your operation. In fact, some may even improve your operational efficiency in the long run as well as bolster your 4CP strategy.
Ready to design your own 4CP Avoidance Strategy to alleviate stress on your business? Find out more and get a free energy assessment from a trusted energy advisor today.
