A component of your electricity supply cost is a capacity fee. In many cases, it can be the second highest part of your overall electricity supply rate behind the energy component and may be valued at 10 to 25 percent in annual energy spend.
The capacity fee is assessed based on your electricity usage at the ‘single peak hour of electricity demand’ on the entire New England grid in the calendar year (a.k.a. Annual System Peak). Your demand for electricity usage at that peak hour is assessed as your ‘capacity tag’ effective June 1 of the following year and defines your capacity fee for 12-months.
Freedom can assist you in management of your capacity assessment charges as we do for a significant number of clients. We take a proactive approach to reducing peak load by monitoring and evaluating influencing factors each day, including grid demand, weather forecasts, and historical data to predict when the ‘peak hour’ may occur. We typically notify clients two days in advance of a potential peak, usually averaging three to five times each summer.
Freedom can actively monitor your capacity tags and advise you on the system annual peak hour in New England. In addition, we offer email, phone, and text alerts to suit your favored method of peak notification. There is no cost to be on the notification list and it is just another way in which we help to lower your overall energy costs.
Vice President of Procurement
Howard Plante joined Freedom in 2008 to assist in the development of the concept of direct end user access to the ISO-NE bulk power pool. In his current role, Howard heads up Procurement and leads the team in designing product cost estimates, structuring, and valuing the hedges that back client contracts. He is also responsible for technical analysis of specific client load requirements and pricing, and analyzes all aspects of electricity supply requirements for clients including capacity obligations and pricing structures. He manages the wholesale pricing desk including review and monitoring of current and forward market conditions, and works in tandem with the retail pricing desk.