What Is a PLC Tag and Why Does It Matter
In PJM's capacity market, each load-serving entity — and ultimately each retail customer — is assigned a share of the total regional capacity obligation. Your individual share is determined by your Peak Load Contribution (PLC) tag: a single number, measured in kilowatts, that represents your proportional contribution to the system's five highest-demand hours during the prior summer.
That number is then multiplied by the current capacity price to determine your annual capacity cost. At the 2024/25 BRA clearing price of $269.92/MW-day:
Every kilowatt you remove from your load during 5CP hours directly reduces your PLC tag for the following year. A 500 kW reduction in your PLC tag at current BRA prices saves approximately $49,300 annually — permanently, until the BRA price changes.
What Are the 5 Coincident Peaks
The five highest one-hour demand intervals recorded across the entire PJM system during the June–September peak season are called the 5 Coincident Peaks (5CP). PJM identifies these hours retroactively after the summer ends — you won't know which hours "counted" until October or November.
However, the 5CP hours are highly predictable in advance. They share a consistent profile:
- Weekdays only (weekends rarely qualify)
- Afternoon hours: typically 3:00 PM–7:00 PM Eastern
- Hot, humid days with low wind and high air conditioning load
- Often coincide with heat waves affecting the mid-Atlantic and Ohio Valley
- Historically concentrated in July and August, occasionally September
Historical pattern: In recent summers, all five 5CP hours occurred on weekday afternoons during temperatures above 90°F at Philadelphia International Airport — a reliable proxy for PJM system stress. If it's not hot in the Delaware Valley, it's unlikely to be a 5CP hour.
How to Monitor for 5CP Hours in Advance
You have several options for advance notification, ranging from free to full-service:
Option 1: PJM's own tools (free)
PJM publishes a daily load forecast on its website, updated multiple times per day. The PJM Load Forecast shows projected system demand for the next 7 days. When the forecast approaches or exceeds prior 5CP threshold levels (typically 145,000–150,000 MW for the full PJM system), you are in high-alert territory. This requires daily monitoring during peak season — it's workable but manual.
Option 2: Third-party alert services (low cost)
Several vendors provide automated 5CP alert services for a modest annual fee — typically $1,000–$5,000/year for a single site. These services monitor the PJM forecast and send email or text alerts when conditions indicate a high-probability 5CP event. For accounts where even a 100 kW tag reduction is worth $10,000+/year, this ROI is immediate.
Option 3: Managed monitoring (full service)
Working with an independent energy advisor who monitors 5CP conditions and provides advance notice with recommended curtailment levels. This is the highest-fidelity option and includes post-season analysis confirming tag reduction achieved.
Building a Curtailment Protocol That Doesn't Disrupt Operations
The most common objection to 5CP curtailment is operational disruption. But in practice, most C&I facilities have curtailable load that has minimal or no impact on core operations. Here's how to identify and structure a practical protocol:
Step 1: Conduct a load disaggregation analysis
Pull 15-minute interval data for the past 12 months and identify what's running during typical 3:00–7:00 PM weekday windows. Segment load into three buckets:
- Non-curtailable: Process-critical equipment, safety systems, servers, refrigeration
- Deferrable: Equipment that can be shifted to off-peak hours without meaningful impact (batch processes, HVAC pre-cooling, EV charging)
- Curtailable: Equipment that can be temporarily reduced or shut off during a 1–2 hour window (lighting, supplemental HVAC, non-critical manufacturing lines)
Step 2: Quantify the curtailable block
Even modest curtailment moves the needle. A 200 kW curtailable block at the 2024/25 BRA price is worth approximately $19,700/year in capacity cost savings. For most facilities, 10–20% of peak demand is curtailable without touching core operations.
Step 3: Document the protocol and designate an owner
A 5CP curtailment protocol is most effective when it's written down, assigned to a specific person, and rehearsed before peak season. A good protocol includes: alert trigger (when to act), specific actions by system (HVAC setpoint changes, equipment shutdowns), duration (typically 2–4 hours), and recovery steps.
Step 4: Pre-cool where applicable
For facilities with significant HVAC load, pre-cooling is highly effective. Lower building temperatures 1–2°F in the 2–3 hours before a forecast 5CP event. During the curtailment window, raise setpoints by 2–4°F. Building thermal mass maintains comfort for 90–120 minutes while HVAC load drops substantially.
Real-world benchmark: Accounts that implement structured 5CP curtailment protocols typically achieve 20–35% PLC tag reductions in the first year. On a 2 MW account at current capacity prices, a 30% tag reduction saves approximately $59,200 annually — for the cost of a few hours of reduced HVAC.
Common Mistakes That Cost You the Reduction
- Missing just one of the five hours. If your facility runs normally during one 5CP hour and curtails the other four, your tag is set by the highest-consumption hour. Consistency across all five events is what drives meaningful reduction.
- Curtailing too late. PJM 5CP hours are identified by hour-ending intervals. If you start curtailing at 4:30 PM on a 4:00–5:00 PM peak hour, you capture only half the benefit. Alert systems that provide 24–48 hours advance notice allow you to prepare properly.
- Not verifying the tag reduction. Your updated PLC tag is published by PJM each fall for the upcoming delivery year. Confirm your reduction was recorded and flows through correctly to your capacity cost calculation. Errors occur.
- Ignoring ISO-NE ICAP tags if you have facilities there. ISO-NE uses a similar — but not identical — methodology called ICAP. The monitoring season and peak hour identification differ. If you have locations in Connecticut, Massachusetts, Rhode Island, or New Hampshire, a separate analysis applies.
The Math on a Typical Account
Here's what structured 5CP curtailment looks like on a concrete example:
| Metric | Before Curtailment | After Curtailment |
|---|---|---|
| Peak demand (kW) | 3,200 | 3,200 |
| 5CP average load (kW) | 2,800 | 1,960 |
| PLC tag (kW) | 2,800 | 1,960 |
| BRA price ($/MW-day) | $269.92 | $269.92 |
| Annual capacity cost | $276,138 | $193,297 |
| Annual savings | $82,841 |
The curtailment in this example requires reducing load by 840 kW during five 1–2 hour windows per summer. For a 3.2 MW industrial facility, that's approximately 26% of peak load for a total of 5–10 hours per year.
Start Now — the Season Is Active
PJM 5CP hours occur between June and September. If you're reading this during that window, the opportunity to reduce your PLC tag for the next delivery year is open right now. Every high-demand afternoon that passes without a curtailment protocol in place is a missed opportunity that won't come back until next summer.
If you'd like a full PLC tag analysis — including your current tag, modeled reduction potential, and a simple curtailment protocol for your specific facility — we can complete that in 48 hours at no cost.