COINCIDENT PEAK DEMAND MANAGEMENT

Coincident Peak Demand Prices Are Increasing

As electricity grids around the world face increasing pressure, utilities and grid operators are increasing their regional coincident peak-demand charges to support required capital investments and to drive region-wide grid efficiency.

Coincident peak-demand charges bill large electricity consumers based on their contribution to the system’s peak demand periods, incentivizing them to reduce usage when the grid is under the most stress.

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In 2025, jurisdictions such as the U.S. Midcontinent Independent System Operator (MISO) increased prices over 2,100%. PJM Interconnection saw a 833% increase, while in the United Kingdom, regional prices increases were between 23% and 53% depending on the region.

How Coincident Peak Demand Charges Work

Coincident peak demand pricing is a method where large energy users are charged based on how much they contribute to the grid’s system-wide peak demand, not just their total usage. Utilities identify the intervals during the year when the entire grid is under the most stress. These are called the coincident peaks, often the 3 or 5 highest intervals in the year

If you use more electricity during those peak intervals, you pay a bigger share of coincident peak demand charges (also called capacity or network costs). There is a strong incentive to minimize energy usage during the coincident peak intervals.

Typical Steps:

The grid operator records the total system load every hour.

At the end of the period, they identify the top “n” peak hours (e.g., 5 highest-demand hours in the year).

Your demand during those hours is averaged or summed.

Your “peak share” determines your demand charge for the next period.

What’s putting pressure on electricity grids?

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Cost Allocation

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Energy Billing is complex

There are several factors that complicate the process of creating energy bills

Energy system complexity

Recent innovation & improvement in our energy systems include

  • rapid electrification including EV charging

  • a mix of traditional and onsite generation

  • exposure to energy markets with dynamic pricing

  • multiple tenants and internal departments

  • new utility tariff structures to support all of this

HOW TO SUCCEED

Select an EMS that can monitor & record the contributing loads and generation points and that can accurately calculate a bill by correctly replicating the tariff structure, including tenant move-in, move-out

Facility complexity

shared spaces, tenant move in move out,

omplex spaces with services and assets shared across energy consumers

HOW TO SUCCEED

Choose a proven monitoring & control platform with accurate price forecasting & market intelligence to optimize revenue while reducing exposure to penalties and costs.

Data Quality

HOW TO SUCCEED

Choose an advanced energy management system capable of real-time decision-making, predictive analytics, and dynamic load balancing to optimize performance across the multiple operational priorities.

The Bottom Line

An EMS needs a powerful billing engine to enable revenue streams, recover costs and drive accountability

Solutions

  • ION Power meters are the most accurate & intelligent power meters available, measuring thousands of power quality and energy variables and transmitting them to the software system.

  • For non-critical loads or circuits, we supply basic meters that provide all the necessary measurements to support energy and electrification management

Electrical Metering

EnergyX® Platform

  • The EnergyX® cloud platform contains all energy management & electrification applications in a single portal, supporting multiple sites, users, languages and timezones.

  • EnergyX® Edge Kits provide onsite monitoring & control and a secure connection to the EnergyX® cloud platform.