|Responding to Increased Rates
The table below illustrates how Capacity costs can impact a customer setting a new rate after June 1, 2014.
The cost of Capacity is on the rise as shown below.
- Planning year 2012-2013: $7,468/MW-Year
- Planning year 2013-2014: $10,384/MW-Year
- Planning year 2014-2015: $45,968/MW-Year
- Planning year 2015-2016: $107,321/MW-Year
- Planning year 2016-2017: $33,047/MW-Year
These Capacity costs are a "pay-me-now or pay-me-later" charge and will drive the rate of retail price offers for select terms. Customers looking to avoid budget sticker shock should look at longer-term contracts to dampen the rate impact and take advantage of the falling Capacity charges in the planning year 2017.
The Capacity costs are set for three years but the largest component of a bill comes from the kWh energy
costs and those fluctuate constantly. A good consultant will vigilantly watch energy prices and advise when to go to market. Acting during an energy market dip can help mitigate the impact of rising Capacity costs.
Other mitigating strategies include participating in a Demand Response
program where reducing load at the request of grid operators can earn extra revenue. Anticipating days of system peak usage and reducing your demand can reduce your "peak load contribution" for the following year. Our experts at Independent Energy Consultants can alert you to these opportunities and recommend strategies that best suit your energy needs.