Capacity tag (PLC / ICAP tag) is an account-specific power allocation quantity used under regional and utility rules to establish capacity requirements or associated cost treatment for a defined service period.
What does capacity mean in this billing context?
Capacity concerns resource adequacy and the relevant obligation to have supply capability available, rather than only the electricity consumed during each hour. A customer tag contributes to allocating that obligation. It is not a measurement of how much energy the hotel used over the whole month.
The PJM load-forecasting manual describes how allocated peaks are used for capacity obligations. Its current material distinguishes those allocations from ordinary energy totals. The hotel should request the distribution company’s account-specific methodology and assigned value.
The bills hub connects the concept with invoice boundaries. A tag can matter to a supplier’s cost model without appearing as a separate line on every hotel statement. The actual agreement establishes whether specified capacity treatment is included or separately passed through.
How does PJM PLC relate to system peaks?
PJM’s process uses RTO-coincident summer peak information and electric distribution company methodologies to allocate peak-load contributions. Manual 19 describes five selected summer peaks and the relevant data process. Customer values can involve utility-specific allocation and adjustment rules beyond a simple average of meter readings.
Do not describe every PLC as precisely the hotel’s unadjusted load during any five hot afternoons. The selected events, metering treatment, normalization, loss factors, or other applicable steps can matter. Obtain the current account record and ask the distribution company to explain how it was established.
The relevant service year may differ from the year the load was measured. Keep measurement period, assigned quantity, and effective dates separate. A purchasing file should identify which value a supplier used in its offer and what happens if the applicable value changes during the proposed agreement.
How does New York ICAP-tag terminology differ?
New York account allocation follows its own rules and utility processes. The Con Edison ESCO FAQ describes customer capacity tags using prior peak contribution and discusses default treatment for new accounts. That is Con Edison evidence, not a rule for every New York utility or PJM account.
The FAQ also identifies resources through which energy service companies can retrieve relevant account information. A hotel should use an appropriate authorized request to obtain its current value and explanation. Do not assume that the recent monthly demand number is the same as the ICAP-tag record.
Compare regions at the conceptual level while preserving their different procedures. An advisor should not copy a PJM five-peak worksheet into a New York account file and label it ICAP without confirming the governing method. Similar commercial purposes do not make the underlying data selection identical.
Which units and dates belong in the tag register?
Record kW or MW, the source, effective period, relevant location, and any stated adjustment. One MW equals 1,000 kW. The EIA electricity-measurement guide provides that power-unit relationship. A capacity calculation must use the same units as its price.
| Field | Account record needed | Reason |
|---|---|---|
| Quantity | Assigned tag and original units | Identify the allocation input |
| Period | Effective start and end | Match the supply service year |
| Method | Utility process and adjustments | Explain measured versus assigned values |
| Status | Measured, adjusted, or default treatment | Identify update uncertainty |
| Contract | Included or separate capacity treatment | Connect the quantity with hotel exposure |
Keep source records with the register. A supplier spreadsheet can contain a forecast or estimate rather than the current utility-assigned quantity. Identify that difference before management treats a modeled input as established fact.
What does assumed capacity-cost arithmetic demonstrate?
Assume, purely for illustration, the relevant tag is 200 kW and an expressly assumed comparable capacity component is $100 per MW per day for 365 days. Convert 200 kW to 0.200 MW, then calculate 0.200 × $100 × 365 = $7,300.
These inputs are fictional. They are not an auction result, current capacity quote, actual hotel tag, or complete supply amount. Taxes, delivery, other supplier components, scaling, and unspecified adjustments are excluded. The actual contract may use a different method or include the component within its price.
Using 200 as though it were MW would overstate this illustrative calculation by a factor of one thousand. The example therefore emphasizes units and the modeled boundary. It does not establish that a lower account tag would change a fixed price already accepted under the agreement.
How does a capacity tag differ from demand or transmission quantities?
A demand charge follows the relevant utility billing determinant, which can be a monthly interval maximum with stated adjustments. A capacity tag follows its regional allocation process and service period. Both can use power units while describing different events.
The transmission tag addresses a network-service allocation quantity. Its relevant peak and effective period can differ from capacity. Keep separate columns and source records rather than place one generic tag value in every component formula.
This distinction matters when investigating an invoice. If a supplier references a capacity quantity, accounting should not answer with a transmission value simply because both are reported in kW. Ask which record and contractual method support the charge.
How do hotel owners and operators use tag information?
Owners use it to understand capacity exposure and approve the product’s coverage boundary. Controllers retain effective values and reconcile separately billed components. Engineering examines whether feasible operational changes can affect relevant future peak measurements without compromising guest service.
Suppliers use account allocation quantities in their requirements and product evaluation. Distribution utilities establish or report customer data under the applicable process. A broker can coordinate retrieval and explanation, but cannot create an official tag by applying an assumed spreadsheet formula.
Discuss timing clearly. Forecast peak alerts can identify possible events, not confirm future selected peaks. The hotel needs an operational plan and evidence of actual performance, while recognizing that the eventual assigned quantity can depend on rules and adjustments beyond one observed interval.
What verification sequence should precede pricing review?
Verify the regional method and account record before interpreting a supplier charge. An older tag, wrong service year, different meter, or unit mismatch can materially distort an otherwise correct multiplication. Keep unresolved updates visible in the bid file.
- Identify the utility, region, meter, and account class.
- Obtain the assigned quantity through an authorized source.
- Record units, effective period, and location.
- Ask about default values, adjustments, and update timing.
- Match the supplier’s input with that account record.
- Review inclusion, pass-through, and change provisions.
- Reproduce any separately modeled component with correct units.
- Retain confirmations and reconcile the first applicable invoice.
If the account value is disputed, request the applicable correction process and evidence. Do not assume a new operational forecast entitles the hotel to an immediate tag revision. The responsible utility’s current process determines how that issue is handled.
How should compensation be disclosed for capacity-related products?
Ask whether broker compensation is embedded in the quoted rate, attached to a separate component, or payable through another agreed method. Request payer, units, inclusion status, and service scope before selecting among products with different capacity coverage.
Use consistent forecast and duration assumptions when estimating dollars. Count embedded amounts once. A transparent recommendation should explain both retained capacity exposure and the economics of the assistance, rather than treating a lower displayed energy rate as the complete price.
What should be updated at the next review?
Update effective tag records, supplier treatment, meter changes, and operating assumptions. Retain prior values so accounting can explain earlier service periods. A historical tag is useful evidence of its period, not an automatically valid input for every future year.
The definition becomes practical when the hotel knows the quantity’s source, units, dates, and commercial treatment. Those records let management distinguish an operational opportunity from an existing contractual promise, and a regional capacity concept from the actual amount appearing in its supply budget.