Off-Peak: Everything You Need to Know About Peak Demand

Dear favorite customers (it’s all of you),

You’ve probably heard of “peak demand,” but what does it mean and how does it affect you?

Peak demand occurs when demand for electricity from the grid is highest. Demand is measured in megawatts (MWs). For reference, 1 MW can power about 250 houses during high demand hours.

In Texas, peak demand happens in the afternoon on the hottest days of the year. It’s driven by our desire to stay cool indoors even when temperatures outside are sweltering. Running your AC when it’s 100 outside requires A LOT of energy.

The all-time record demand for ERCOT was August 10th, 2023 with a whopping 85,508 MWs. Second place? That was July 20th, 2022 with 80,148 MWs.

Texas heat isn’t the only thing that leads to new peak demand records. As the state’s population grows, there are more and more houses that need electricity every year.

1. When you’re using more electricity, your bill increases. Even with a fixed rate electricity plan.

We did an analysis of our customers’ usage and found that energy consumption basically doubles from April to July. Larger houses increase even more.

2. As statewide energy consumption increases, so do wholesale prices.

Your fixed rate plan protects you from increases in wholesale prices during your contract. When it’s time to choose a new plan, you’re shopping in a totally different market.

3. If demand surpasses the Texas grid’s generation capacity, ERCOT may be forced to deploy controlled outages.

ERCOT has already stated they might be required to implement rolling blackouts this summer. Learn more about alerts deployed by ERCOT here.

What can you do?

You have more control than you think. The single, most powerful driver of electricity consumption is your AC unit.

You can reduce your bill and help reduce peak demand on the Texas grid by setting your thermostat to 78 during the hottest hours of the day—rely on your ceiling fans or portable fans to keep cool instead.

Check out our list of 100 energy saving tips for other ways to limit your energy consumption.

Written by Javier Hinojosa

Javier Hinojosa, Vice President of Retail Power at BKV Energy, has over fifteen years of management experience in M&A, consulting, supply chain, technology, and operations. He is responsible for overseeing all aspects of BKV Energy's business, from finance and brand development to customer service and go-to-market strategy.