Capacity Tags (PLC) Explained for Ohio Businesses
The short answer
A capacity tag — also called a peak load contribution, or PLC — is your share of PJM's summer peak, in kW, assigned to each account by your utility. It's multiplied by the PJM capacity price to set your capacity cost for the 12 months starting each June 1. At the 2026/27 price of $329.17/MW-day, every kW of tag costs about $120 a year, compared with about $10.56 in 2024/25. The capacity tag is separate from your monthly demand charge and from your transmission tag (NSPL).
For how monthly kW demand is billed, see demand charges explained; for tactics to cut that monthly peak, see how to lower peak demand charges; for an operations playbook to cut load during PJM peak hours, see the PLC operations guide; and for auction results and contract language, see PJM capacity costs and auction results.
How Ohio utilities set your tag
PJM, the regional grid operator, must line up enough generating capacity to cover the summer peak plus a reserve margin. It allocates that obligation to each utility zone, and each Ohio utility — AEP Ohio, Duke Energy Ohio, AES Ohio, Ohio Edison, The Illuminating Company and Toledo Edison — divides its zone's share among customers.
- The measurement. Your tag is based on your load during a handful of summer peak hours, commonly the five highest-demand hours on separate days (often called "5CP"). Each utility publishes its own method, including whether it uses PJM-wide or zone peaks.
- Interval vs non-interval meters. Accounts with interval data are measured directly; others are typically estimated from rate-class load profiles.
- Adjustments. Utilities apply scaling factors and loss factors so the sum of customer tags matches the zone's obligation.
- When the peaks happen. PJM peaks fall on hot weekday afternoons, which is why a church or a night-shift plant can have a small tag relative to its monthly demand.
The June 1 reset
The tag is set from one summer and applies from the following June 1 through May 31.
| Summer that sets the tag | Tag in effect | PJM capacity price (RTO) |
|---|---|---|
| Summer 2025 | June 1, 2026 – May 31, 2027 | $329.17/MW-day |
| Summer 2026 | June 1, 2027 – May 31, 2028 | $333.44/MW-day |
| Summer 2027 | June 1, 2028 – May 31, 2029 | $325.00/MW-day |
Two consequences: what you do during PJM's peak hours this summer shows up in next year's costs, not this year's; and a new tag arrives each June 1 even if nothing changes in your contract.
What a kW of tag costs
Convert the PJM price with $/MW-day × 365 ÷ 1,000.
| Delivery year | PJM price ($/MW-day) | ≈ $ per kW-year | Cost of a 100 kW tag |
|---|---|---|---|
| 2024/25 | $28.92 (Duke's DEOK zone: $96.24) | $10.56 (DEOK: $35.13) | $1,056 (DEOK: $3,513) |
| 2025/26 | $269.92 | $98.52 | $9,852 |
| 2026/27 | $329.17 (cap) | $120.15 | $12,015 |
| 2027/28 | $333.44 (cap) | $121.71 | $12,171 |
| 2028/29 | $325.00 (cap) | $118.63 | $11,863 |
These figures are before utility scaling factors, losses and any supplier margin, so your actual charge will differ somewhat. The last three auctions all cleared at the price cap under a collar (roughly $175 floor to about $325+ cap) that applies through 2029/30. The 2027/28 auction cleared 6,623 MW short of PJM's reliability requirement and the 2028/29 auction 6,831 MW short — signs that supply is tight.
How the tag shows up in what you pay
On the utility's default price. Capacity is built into the per-kWh default price for your rate class. For most small and mid-size schedules, your individual tag doesn't change your default price, which also means lowering your tag earns you little while you stay on default service.
On a fixed all-in supplier contract. The supplier prices your tag into the fixed rate at signing. Ask how the contract treats the new tag each June 1 — some fix the price regardless, others adjust it if the tag changes. With capacity prices known through May 2029, a fixed price that includes capacity isn't a bet on the auction; it just bundles a known cost.
On a capacity pass-through contract. You pay tag × capacity price as a separate charge, usually with the utility's scaling adjustments. You keep every dollar of savings when your tag falls — and pay more when it rises.
Where to find your tag. Ask your supplier or broker, who can request it from the utility with your authorization; some supplier invoices and utility data portals also show it.
A quick way to judge your tag
Divide your tag by your summer peak demand. A ratio close to 1 means your site runs flat out on hot weekday afternoons, when PJM peaks. A much lower ratio means your peaks fall at other times — and that the capacity cost in your supplier price should reflect it. If the tag looks wrong, ask the utility, through your supplier, how it was calculated.
Worked example: a 500 kW tag at the 2026/27 price costs about 500 × $120.15 = $60,075 a year. Cutting it by 100 kW during PJM's peak hours in summer 2027 would save about $11,863 in the 2028/29 delivery year — but only on a pass-through contract, or one that re-prices for tag changes.
NSPL: the transmission tag
Your network service peak load (NSPL) is a separate tag used by some utilities to allocate transmission costs. It's set from your load during the zone's single annual peak hour rather than several PJM peak hours, and it typically affects transmission charges on the delivery side of the bill rather than the generation price. The two tags usually move together — both reward low load on the hottest weekday afternoons — but they're calculated differently, so confirm with your utility which one drives which charge on your account.
FAQ
What is a capacity tag on an Ohio electric bill?
It's your share of PJM's summer peak demand in kW, assigned by your utility and multiplied by the PJM capacity price to set your capacity cost for the year starting June 1.
When does my capacity tag change?
Every June 1, based on your load during the previous summer's peak hours.
How much does a kW of capacity tag cost in 2026?
About $120 a year at the 2026/27 PJM price of $329.17/MW-day, before utility adjustments.
Is the capacity tag the same as my demand charge?
No. Demand charges follow your highest monthly interval and appear in delivery charges; the capacity tag follows PJM's summer peak hours and is priced into generation.