If you’re an industrial or other big power user, today might be an important day — because if you use power at the wrong time during a heat wave, it could create higher electricity costs for you next year.
“I’ve been busy contacting clients all morning,” said Matt Brakey, president of Shaker Heights-based Brakey Energy, which consults big power users on ways to decrease their electricity costs.
It’s all because the rates of big users are largely determined by how much power they use during times when demand on the electric grid is at its highest, Brakey said. Rate programs often look at how users drew power during the five hours when the demand is highest on the grid for the year, which almost always occur on the hottest days of the year because of air conditioners being run longer and harder.
“Today is going to be one of those days,” Brakey said on the morning of July 26, as a heat wave moved across the Midwest and toward the East Coast, where a larger population shares the same grid as Ohio.
“Yesterday was already the highest demand-day so far this year — actually, it was the highest since 2013,” Brakey said.
Most sophisticated users of really big amounts of power, like steel mills or foundries, are already attuned to what’s happening. Many such operations, including many of Brakey’s customers, will shut down their operations in the afternoon and resume them in the evening, when demand on the grid is much lower.
Some users, like big high-rise office buildings, have little choice in the matter — they have to provide electricity and air conditioning to their tenants and employees. Other smaller businesses, or residents, don’t have their rates calculated based on peak demand, and are not affected in the same way as big industrial users.
But for those who do have their electricity usage monitored by FirstEnergy or other power providers, a mistake today could be costly. It won’t show up on bills now, but it will affect how much many big users pay for their power next year, when rates are locked in again for a year, beginning in June 2017, Brakey said.
Customers who are careful, or who participate in special programs offered by FirstEnergy to migrate power use to non-peak hours, can save significantly. Brakey said he has one foundry client that is saving a third on its electric rates by melting metal at night, instead of during the heat of the day.
He suggests others that can, reduce their electricity consumption today, especially in late afternoon.
“The magic hour is usually between 4 p.m. and 5 p.m. That’s when power consumption tends to be the highest,” Brakey said.
Dan Shingler – Cleveland Crain’s Business