What Is a PLC Tag and Why Does It Matter
In PJM's capacity market, every retail customer carries a share of the region's total capacity obligation. Your share is your Peak Load Contribution (PLC) tag: one number, in kilowatts, based on your load during the system's five highest-demand hours the summer before.
That number is multiplied by the capacity price to set your capacity cost. Tags set next summer will apply to the 2028/29 delivery year, which cleared at $325.00/MW-day:
Every kilowatt you take off your load during the 5CP hours comes off next year's tag. At $325/MW-day, a 500 kW reduction is worth about $59,300 for that year.
What Are the 5 Coincident Peaks
The five highest one-hour demand readings on the entire PJM system between June 1 and September 30 are the 5 Coincident Peaks (5CP). They're confirmed only after the season ends, so you won't know for certain which hours counted until the fall.
They are fairly predictable in advance, though. They usually share a profile:
- Weekdays (weekends rarely qualify)
- Late afternoon, roughly 3:00 to 7:00 PM Eastern
- Hot, humid days with heavy air conditioning load across the region
- Most often in July and August, sometimes June or September
How to See 5CP Hours Coming
You have a few options, from free to fully managed.
Option 1: PJM's own forecast (free)
PJM publishes a daily load forecast several days ahead, updated through the day. When the forecast approaches the summer's highest loads so far, you're in likely-peak territory. It works, but someone has to check it every day all summer.
Option 2: Alert services
Several vendors watch PJM's forecast and send email or text alerts when a high-probability 5CP hour is coming. For an account where even a 100 kW tag reduction is worth about $11,900 a year, a paid alert service usually pays for itself quickly.
Option 3: Managed monitoring
An energy advisor watches conditions for you, sends notice with a recommended curtailment level, and confirms after the season how much your tag actually came down.
Building a Curtailment Plan That Doesn't Disrupt Operations
The usual objection is disruption. In practice, many facilities have load that can come down for a couple of hours with little or no impact on core operations. Here's how to find it and plan for it.
Step 1: Break down what's running at peak
Pull 12 months of 15-minute interval data and look at what's running on weekday afternoons. Sort it into three buckets:
- Can't touch: process-critical equipment, safety systems, servers, refrigeration
- Can move: things you can shift to other hours (batch processes, pre-cooling, EV charging)
- Can reduce: things you can turn down or off for an hour or two (lighting, supplemental HVAC, non-critical lines)
Step 2: Size the reducible block
Even a modest block matters. At $325/MW-day, 200 kW off your tag is worth about $23,700 a year.
Step 3: Write it down and name an owner
A plan works best when it's written, assigned to one person, and rehearsed before the season. Include the trigger (when to act), the specific actions by system (setpoint changes, equipment to shut down), the window, and how to bring everything back.
Step 4: Pre-cool where you can
For buildings with heavy HVAC load, cool the space a little lower in the hours before a likely peak, then raise setpoints during the window. The building holds its temperature for a while, and your load drops during the hour that counts.
Common Mistakes That Cost You the Reduction
- Missing one of the five hours. Your tag is based on your average load across all five peak hours. Run at full load during one of them and you give back about a fifth of the reduction. Consistency across all five is what pays.
- Starting too late. Peak hours are measured by the hour. If you start cutting at 4:30 on a 4:00 to 5:00 peak hour, you capture only about half the benefit. Advance notice lets you start on time.
- Not checking the result. Your utility calculates your new tag after the season, and it takes effect on June 1. Confirm the reduction actually shows up. Mistakes happen.
- Forgetting New England sites. ISO-NE sets capacity tags differently, based on the single annual system peak hour, so sites in Connecticut, Massachusetts, Rhode Island, New Hampshire, Maine, or Vermont need their own plan.
The Math on an Example Account
Here's what a planned 5CP reduction looks like on an example 3.2 MW facility:
| Metric | Before | After |
|---|---|---|
| Peak demand (kW) | 3,200 | 3,200 |
| Average load during 5CP hours (kW) | 2,800 | 1,960 |
| PLC tag (kW) | 2,800 | 1,960 |
| Capacity price ($/MW-day, 2028/29) | $325.00 | $325.00 |
| Yearly capacity cost | $332,150 | $232,505 |
| Yearly savings | $99,645 |
In this example the facility cuts 840 kW, about 26% of its peak, during five windows of an hour or two each summer. That's roughly 5 to 10 hours a year. (Your tag also includes utility adjustments, so actual numbers vary.)
Plan Now, Before Next Summer
The 5CP window runs June 1 to September 30. The time to find your reducible load and write the plan is the off-season, so you're ready on the first hot weekday in June.
If you'd like to know your current tag, what it costs you, and how much a plan could take off, we'll run that analysis free, with no obligation.