As a customer success manager, I spent the summer of 2024 working closely with building engineers in Texas to help them reduce 4CP (Four Coincident Peak) charges. These charges, which often account for more than 10% of a building’s annual energy costs, are tied to the highest demand periods on the ERCOT grid. Mastering curtailment strategies during these peak times can mean big savings, but execution isn’t always easy.
Over the years, I’ve worked with engineers across a range of buildings, each with its own systems, constraints, and backgrounds. While the goal is always to cut energy use during peak demand events, the success of any curtailment plan depends on preparation, buy-in, and strategic execution.
Here are my tips for what works—and what doesn’t—when it comes to lowering 4CP costs.
Step 1: Understand the Impact of 4CP
4CP charges are determined by a building’s average demand during the four highest grid demand periods from June through September. If you reduce demand during those peak windows, you lower your 4CP costs for the entire following year. The math is simple: at around $60 per kW annually, every kilowatt avoided can translate to significant savings. For example, reducing your building demand by 100kW for a couple hours a month June-September could lower your electric bill over $6,000 the following year.
The challenge? These peaks typically occur on the hottest days of the year, when HVAC systems are working their hardest. You must carefully balance cost savings with tenant comfort, avoiding any drastic cutbacks that could lead to complaints—or worse, a building that’s too warm to recover quickly.
Step 2: Build a Plan Before Peak Season Hits
One of the biggest lessons I’ve learned is that successful curtailment starts long before summer. The engineers who see the best results are the ones who set their strategy months in advance. Here’s what that looks like:
- Identify non-essential equipment that can be reduced or turned off completely. This might include lighting in common areas, some fraction of your air handlers or dampers in occupied spaces, ventilation in parking garages, or HVAC/lighting in unoccupied spaces. Property management needs to be able to show unoccupied spaces, but asking them to hold off on the hottest days of the year in exchange for thousands of dollars in energy bill savings is just heads-up engineering.
- Ensure you are comfortable making those changes. Some equipment is easily adjustable, while others require complex manual changes. In the middle of a busy, burning-hot day, how much time can you really invest in powering down then powering back up?
A well-designed curtailment plan should minimize the need for you to physically walk the building when a peak event occurs. If you have to spend valuable time running from one floor to another to manually shut things down, there’s a good chance you’ll miss the window.
The best-performing buildings set up automated or centralized adjustments ahead of time. For example:- Set lighting and HVAC schedules in advance so that reductions happen automatically. Gridium sends day-ahead emails for 4CP events so you can make those changes before clocking out the night before.
- Use control systems to adjust airflow and temperature remotely rather than making manual adjustments.
- Turn off non-essential equipment early in the day so you can focus on making the most critical adjustments at peak time.
- Test how much load can realistically be shed without upsetting tenants.
- Verify how much energy you saved with a data monitoring platform like Gridium. It’ll help you rationally evaluate whether the effort is worth it, rather than simply guessing.
Step 3: Own Your Curtailment Plan
Your buy-in on the plan is critical. Too often, curtailment initiatives are dictated from the top down, without fully considering what’s practical on the ground. When you take an active role in developing the curtailment plan, not only are you more likely to pull it off, your effort is more likely to get noticed.
Rather than just being told to “turn things off,” focus on what adjustments make the most impact while causing the least disruption. Set points, fan speeds, and lighting schedules are all areas where you can fine-tune curtailment strategies.
Step 4: Minimize Disruption to Tenants
Fear of losing the building during 4CP curtailment is well-founded: you’re removing less warm air during the hottest part of the hottest day of the year. But it doesn’t have to be a crisis if you’re proactive:
- Pre-cool the building in the morning so when it comes time to reduce your HVAC you’re not already at the top end of your setpoints.
- Adjust set points gradually rather than making abrupt temperature changes that tenants will notice.
- Engage property managers and tenants ahead of time so they understand the purpose of the curtailment strategy. If tenants know a slight temperature increase could save thousands of dollars, they may be more willing to cooperate.
Step 5: Track Results and Improve Each Year
A successful curtailment event should be evident in your building’s energy data, showing a clear drop in demand during the 4CP period. The Gridium platform makes this extremely easy to figure out. I also help Gridium customers dig into their energy demand graphs to connect the impact of turning off equipment on savings.
At this Dallas-based office tower, 4CP forecast alerts from Gridium helped the building team know to curtail on July 1, 2024, which ended up being one of the 4 Coincident Peak days of the year.
If you didn’t achieve the expected demand drop, analyze why.
- Did you avoid making adjustments for fear of hot calls?
- Did peak demand calls occur on days when you were stretched too thin with other issues?
- Did one adjustment take all the time you could spare for the whole period?
These are all problems you can solve–and are likely worth solving for the savings they’ll generate.
Why Any of This Matters—As If You Didn’t Already Know
Building engineers are under a tremendous amount of pressure to learn new, more complex automation systems while keeping tenants happy with a smaller team while somehow reducing operating cost.
Reducing 4CP charges is an easy win—it reduces costs, increases your operation’s resiliency, and has a significant environmental benefit, since peak grid demand is often solved using the dirtiest, most expensive power sources.
CTA: Want help building and testing your building’s 4CP strategy? Let’s talk.
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