Hi! One question I get asked quite a bit is, “What impact would a lighting project have on my facility’s energy rate?”
If you’re looking to reduce your electricity usage, a lighting project will help you do that. But another surprise benefit is the impact it’ll have on your electric rate.
In this week’s Two-Minute Tuesday, we’ll show you exactly how.
What pricing factor does a lighting project impact?
One factor that suppliers take into consideration when giving an electric supply rate is your PLC number, or Peak Load Contribution.
This is the capacity and transmission — “demand” — charges that are attached to your facility.
Your PLC is measured over the 5 heaviest days of grid usage in the year. Think of a summer afternoon when everyone’s using a lot of air conditioning.
PJM will measure your usage on those 5 heaviest days and assign a PLC number (PLC tag) to you. The utility — in this case ComEd here in northern Illinois — will post that number to your account in December and it will go into effect the following June.
Lighting Project and PLCs
So here’s how a lighting project affects PLCs.
Think about an LED bulb that you’re putting in, replacing an old incandescent or metal halide or whatever bulb you currently have in your fixtures. The LED will put out much less wattage and use fewer kilowatt-hours over the course of those 5 days that the grid is measuring over the hot summer months.
The immediate impact you’re going to see is on the next month’s bill following the project’s completion. Your usage (kilowatt-hours) will be lower because those LEDs are using less energy compared to older bulbs.
You’ll experience a later impact to your PLCs in June the year after you complete the lighting project. So while you see an immediate change in your usage on next month’s bill, your change in PLC number will impact next year’s bill.
What does this look like?
Here’s a quick customer example.
Working with one of our local manufacturing clients, we started looking at new rates for their electricity contract that’s expiring this year. The did a lighting project for efficiency last spring.
While they got the full benefit in the summer from lower usage (the lighting project reduced their usage by about 1 million kWh), where we really saw the benefit was in the PLC number.
In November, we started looking at pricing for them. And the original pricing came in significantly higher than their current rate.
Waiting until December when ComEd came out with new PLC numbers starting in June 2020, that PLC number was cut in half — they were in the 500 range and got cut to about 250. This resulted in around 14% savings over their current contracted rate.
A lighting project can impact your energy rate.
As you can see, a lighting project can impact more than your usage. If you’re considering a lighting project for your facility, feel free to reach out to us for guidance.
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