Xcel Energy in Minnesota recently changed their on-peak demand window from 9am-9pm to 3pm-8pm for commercial TOU rates. This dramatically changes the demand management calculus. A client whose peak demand used to occur at 10am during the old on-peak window now peaks at 10am which is OFF-PEAK under the new window. Their on-peak demand charge dropped 35% just from the window change ? no operational changes at all. Is anyone tracking utility peak window changes as audit opportunities?
Time-of-use demand rates ? peak window shifting as a strategy
Steven ? PGE in Portland changed their on-peak window from 6am-10pm to 5pm-9pm for some commercial schedules in 2023. Massive impact. Clients with morning-heavy load profiles saw on-peak demand charges plummet. Clients with evening-heavy profiles saw increases. Every TOU peak window change creates winners and losers among commercial customers.
This is an underappreciated audit angle. When utilities change TOU peak windows ? and many are doing so as solar generation shifts the system peak to late afternoon ? the optimal rate schedule for each client may change. A client who was best served by a flat demand rate when peak windows were wide might now be better on a TOU rate with a narrow afternoon peak window.
In Arizona, APS changed their on-peak period to 4pm-7pm which is the tightest peak window Ive seen. For clients who can shift significant load out of that 3-hour window the demand charge savings are dramatic. A restaurant that serves lunch but closes before 4pm has essentially zero on-peak demand. On the old 11am-9pm peak window that same restaurant was paying substantial on-peak demand charges during lunch service.
Joanne makes a good comparison. The value of TOU demand management is inversely proportional to the width of the peak window. A 3-hour peak window like APS gives clients 21 hours of off-peak opportunity. A 12-hour window like Alliant gives only 12 hours. The narrower windows in the West and South are largely driven by solar generation shifting system peaks.
In San Antonio, CPS Energy is considering moving to a 4pm-8pm summer peak window from their current 1pm-7pm window. If that change goes through, clients with afternoon-heavy production schedules will see shifts in which hours drive their demand charges. I monitor PUC rate case filings specifically to catch these window changes before they take effect so I can advise clients proactively.
Michelle ? monitoring rate case filings for TOU window changes is exactly right. The change creates a 6-12 month window of opportunity where most clients dont realize their peak demand period has shifted and havent adjusted operations accordingly. The auditor who identifies the shift and recommends operational adjustments captures the savings while competitors are still analyzing old peak windows.
Alliant Energy in Cedar Rapids still uses a very wide on-peak window ? 8am-8pm. No narrowing in sight. The wider the peak window, the less opportunity for load shifting because so many operating hours fall within the peak period. Iowa clients have much less TOU demand optimization potential than clients in Arizona or Minnesota with narrow peak windows.