How Forecasting Helps C&I Operations Cut Energy Bills

Some commercial and industrial (C&I) operations pay far more for the same electricity than others. Some rate contracts are fixed, some variable. Moreover, the price per kWh is actually a relatively small part of a C&I energy bill.

Some commercial and industrial (C&I) operations pay far more for the same electricity than others.

In addition to their energy charges, C&I facilities are dinged for the maximum rate at which they use energy, typically set by a single 15-minute spike. These demand charges can easily total 30% or more of a facility's electric bill.

Coincident peak (CP) programs add yet another layer of cost in many regions. In Texas, transmission costs tied to coincident peaks often make up another 30-40% of a large customer's total annual bill, and they're determined by just four 15-minute intervals each summer.

The facilities that manage these costs well aren't necessarily the biggest or the most efficient. They're the ones that a) have the flexibility to curtail or shift load when needed, and b) have some foresight into what the grid is about to do, far enough in advance to actually do something about it.

The facilities that manage these costs well aren't necessarily the biggest or the most efficient.

Not every load can flex the same way

A facility's capacity for load flexibility depends on what it does.  

Commercial buildings tend to have the easiest path. HVAC, lighting, and other non-process loads can shift or shed for short windows with little operational impact, which is why demand response programs have targeted this segment for years.

Industrial facilities carry more constraints. Production schedules, contractual delivery dates, and process continuity requirements mean load can flex, but usually within a narrower band and with more advance planning required.

Data centers can be split into several different categories. The conversation around load flexibility is dominated by the following two extreme cases:

• Cryptocurrency mining operations can respond very quickly to high prices or CP risk, cutting load within minutes when the economics favor it. Crypto miners have been known to save millions of dollars a year with this strategy.

• AI workloads, on the other hand, can be very difficult to curtail without disrupting compute jobs. Even AI data centers, however, are increasingly exploring—or being forced to explore—load flexibility to support the grid’s large load interconnection needs.

Even AI data centers, however, are increasingly exploring—or being forced to explore—load flexibility to support the grid’s large load interconnection needs.

Why solar is not an adequate hedge

Solar used to provide a meaningful hedge against energy price volatility and coincident peak charges. If a facility had a large enough solar array, they likely wouldn't pull much power from the grid during the highest-demand times. But evolving grid dynamics have changed the equation, especially when it comes to CP.

As solar penetration has grown, the tightest grid conditions in markets like ERCOT have shifted from the traditional afternoon load peak toward the net load peak, later in the day when solar output fades.  

As a result, on-site solar generation no longer lines up reliably with the hours ERCOT uses to set coincident peak charges, and the gap is widening. Large C&I customers who assumed their solar array had them covered are learning otherwise. Amperon's 4CP program guide covers the mechanics behind that shift in more depth.

Three ways to profit from load flexibility

There are multiple ways to get value out of load flexibility, and each one calls for a different kind of foresight:

1. Demand response (DR) events are called by a grid operator or demand response aggregator during high load events, rewarding participants based on how much load they shed during the event window. These events actually earn participants money rather than reducing costs. Multiple program options are available in each region; contact Amperon to discuss your specific needs.  
   
   • Virtual power plant operators: see here for more information on grid forecasting solutions.

2. Coincident peak (CP) avoidance is the highest-stakes version. CP intervals are confirmed only after the fact, meaning a facility has to forecast and act on CP risk well before settlement reveals whether it was in fact necessary. Given the financial impact of a miss, most operators with any amount of load flexibility find CP avoidance to be a core cost-saving strategy.
   
   • Operators need dedicated coincident peak alerts for each market in which facilities operate.  

3. Price avoidance means cutting load when day-ahead or real-time prices spike, which requires an accurate short-term price forecast and the operational ability to act on it, often within the hour. For commercial buildings, simple actions like adjusting thermostat setpoints can make a difference. For industrial and data center operations, careful curtailment planning is important to maintain safety and minimize disruption.
   
   • Note: not all facilities are exposed to these costs. Contact Amperon to discuss your specific situation.

Companies can stack the value of these strategies. With sufficient foresight, curtailments that earn revenue through demand response programs may also avoid high prices and, potentially, coincident peak charges. These periods don't always overlap, so trade-offs are often required. But with careful planning and decision making, load flexibility can drive both revenue and cost savings for commercial and industrial operations.

Companies can stack the value of these strategies.

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