How to Lower Your PJM Capacity Tag (PLC) in Ohio

Ohio market insight · Capacity & grid

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

Your capacity tag, or peak load contribution (PLC), is set from your load during PJM's five highest summer peak hours, each on a different day between June and September. AEP Ohio and FirstEnergy's Ohio utilities publish methods based on those five PJM-wide hours; Duke Energy Ohio and AES Ohio publish their own methodologies for suppliers. Every kW you cut during those hours in summer 2027 is worth about $118.63 in June 2028–May 2029 — but you only collect it if your contract passes capacity through or re-prices when your tag changes. The playbook: forecast likely peak afternoons, pre-plan which loads move, respond on more days than the five that count, and log what you did.

For what a capacity tag is and how it shows up on bills, see capacity tags explained; for how monthly kW demand charges are billed, see demand charges explained, and for tactics to cut them, how to lower peak demand charges; for the auction prices and per-account math, see PJM capacity auction results and capacity bill math; for PJM's alert messages, see PJM alerts and what to do; and for getting paid to curtail through demand response, see demand response earnings.

How Ohio utilities calculate your tag

PJM gives each utility zone a capacity obligation based on its weather-normalized summer peak; the utility divides it among customers.

Utility	Peak hours used for the capacity tag	Notes from the utility's published method
AEP Ohio	PJM's five peak date/times, published annually	Interval meters use actual hourly load; others use class load profiles scaled to actual usage; loss factors by voltage (about 1.09 at secondary in its settlement procedures) and a weather-normalization factor
Ohio Edison, Illuminating Co., Toledo Edison (FirstEnergy)	The five PJM pool peak hours, June 1–September 30	Loss factor by service level plus a reconciliation factor to the zone's weather-normalized peak; tags calculated each December and available January 1
Duke Energy Ohio, AES Ohio	Published in each utility's supplier methodology	Ask your supplier or broker to confirm the method and the hours used for your account

Two practical consequences:

It's an average of five hours. If you cut 100 kW in four of the five peak hours and miss the fifth, your tag falls by about 80 kW, not 100. Consistency matters more than depth.
Non-interval accounts can't move their tag much. If your meter isn't read hourly, your tag comes from a class load profile, so peak-hour actions barely register. Interval metering is a prerequisite.

The transmission tag (NSPL) is separate: AEP Ohio sets it from the zone's single annual peak hour, and FirstEnergy from the five highest zone peak hours in the zone's peak season. Summer afternoon reductions usually help both.

What a kW is worth, summer by summer

Summer you reduce load	Tag applies	PJM price	Value per kW of tag cut
2026 (effectively set)	June 2027–May 2028	$333.44/MW-day	≈ $121.71
2027	June 2028–May 2029	$325.00/MW-day	≈ $118.63
2028	June 2029–May 2030	Auction in Dec 2026; collar ~$175–$325	≈ $64–$119 if inside the collar

Summer 2026's peak season is essentially over — it included PJM's all-time record hour on July 2 (about 168 GW, 5–6 p.m.) — so the next chance to change a tag is summer 2027. Values are before utility scaling factors.

Worked example

Illustrative only. Assumptions: an interval-metered plant on a capacity pass-through contract averages 500 kW during PJM's peak hours; its plan can shed 120 kW for four hours; it executes on 10 alert days and catches four of the five peak hours; utility factors are ignored.

Average reduction across the five peak hours: (120 × 4 + 0) ÷ 5 = 96 kW
Tag falls from about 500 kW to about 404 kW
Value in 2028/29: 96 × $118.63 = $11,388
If it had caught all five: 120 × $118.63 = $14,236

Set that against what the response costs: overtime or lost output on ten afternoons, an alert service, and staff time. For a plant that can shift a batch process to the evening, the math is usually easy; for one that loses sales when it curtails, it may not be.

The peak-day playbook

1. Forecast the window. PJM's peak hours fall on hot weekday afternoons — the top hours on June 23, 2025 and July 2, 2026 were both 5–6 p.m. Treat 2–7 p.m. on the hottest weekdays as the risk window. Use a supplier or broker peak forecast plus PJM's Hot Weather and Maximum Generation alerts as triggers.

2. Pre-approve the response menu. Write down, per site, what moves and what never does:

Facility type	Typical peak-hour levers	Never touch
Offices	Pre-cool, chiller staging, widen setpoints within limits, pause EV charging	Life safety, IT rooms
Manufacturing	Shift batch runs, stagger compressors, lower compressed-air pressure, reschedule washdowns	Processes that would scrap product
Cold storage and grocery	Pre-chill, move defrost cycles, dock-door discipline	Product temperature limits
Fleets and warehouses	Delay vehicle and forklift charging to evening	Vehicles needed for the next shift
Sites with batteries	Discharge through the window	Backup reserve for outages

3. Respond more often than five times. PJM confirms the five hours only after the summer ends, so you'll respond on some days that don't count. Set an alert threshold that balances missed peaks against false alarms; missing one peak costs 20% of the benefit.

4. Name owners. One person per site per shift with authority to act. Playbooks fail when "someone" is responsible.

5. Log and verify. Record start and stop times and the kW shed. In winter, ask your supplier for the five PJM hours and your new tag, and compare them to your logs and interval data. If the tag looks wrong, ask the utility, through your supplier, how it was calculated.

Make sure you get paid for it

Your supply arrangement	Does a lower tag lower your cost?
Utility default service (SSO)	Barely — default prices use rate-class averages
Fixed contract that re-prices for tag changes	Yes, from the next June 1
Fixed contract with no tag adjustment	Not until renewal, when a lower tag should mean lower offers
Capacity pass-through	Yes, dollar for dollar from the next June 1
Demand response	A lower tag also lowers the capacity you can sell — see demand response earnings

Before investing effort, confirm your arrangement with your supplier. For contract terms that capture tag savings, see negotiating Ohio energy contracts; for the interval data you'll need, see load profiling.

FAQ

When is my Ohio capacity tag set?

From your load during PJM's five highest peak hours between June and September; the resulting tag applies from the following June 1 through May 31.

How much is lowering my tag worth?

About $118.63 per kW for June 2028–May 2029 if you cut load during summer 2027's peak hours, before utility adjustments — on a contract that passes through or re-prices capacity.

Do I need to cut load in all five peak hours?

The tag is an average of the five, so each missed hour costs about a fifth of the benefit.

Does lowering my monthly demand charge lower my tag?

Only if the reduction happens during PJM's peak hours. A morning start-up fix lowers demand charges but not the tag.