Capacity tag (PLC) errors
In PJM, a facility's capacity cost is roughly its peak load contribution (PLC, or capacity tag) multiplied by the capacity clearing price. A capacity tag error is an incorrect PLC or transmission obligation on an account; because the tag is set once and billed all year, one error inflates twelve months of charges.
Why the tag now matters so much
PJM's capacity clearing price rose from $28.92 per MW-day for 2024/25 to $329.17 for 2026/27. Each megawatt of tag is now worth about $120,000 a year at the auction rate, before retail adjustments. A tag that is even slightly too high costs real money. More on PJM capacity prices.
How tags go wrong
- Interval or meter data used for the peak hours is wrong, estimated or from the wrong meter.
- A utility scaling or loss factor is applied incorrectly.
- The tag was not updated after a site closed, curtailed load or changed its operations.
- The supplier bills on a different tag than the utility assigned.
- A transmission obligation (NSPL) is miscalculated or mismatched with the account.
How to check yours
- Get each account's current PLC and transmission tag from the utility or your supplier.
- Pull interval data for the peak hours the utility used and recompute the tag with the utility's published method and factors.
- Compare the tag on supplier invoices with the utility's figure.
- Confirm whether your contract fixes capacity cost or passes it through.
- Then plan peak reduction for next summer, which lowers future tags.
Discovery checks capacity treatment, tags and billing determinants as part of audits for PJM accounts, before any procurement decision.
Questions buyers ask
What is a peak load contribution (PLC)?
A PLC, or capacity tag, is an account's assigned share of the PJM system peak. The utility calculates it from the account's load during PJM's peak hours of the prior summer, applies its own scaling factors, and the result sets the account's capacity obligation for the delivery year that runs June 1 to May 31.
How much is a capacity tag worth?
At the 2026/27 clearing price of $329.17 per MW-day, each 1 MW of tag is roughly $120,000 a year at the wholesale auction rate, before loss and scaling factors and contract terms. Retail bills differ, but the scale is why a wrong tag matters.
Can a wrong tag be corrected?
Often, when the error is in the data or calculation, such as wrong interval data, a missed scaling factor or a tag carried over after a site closed or cut load. Correction and any refund depend on the utility's rules and the supplier contract.
Does lowering peak load next summer help?
Yes, for future delivery years. Reducing load during likely system peak hours lowers the next tag. That is an operational strategy, often with a demand-response provider; checking that today's tag is calculated correctly is an audit task.
Find out what your bills should have cost.
Send one recent bill per site, or a list of accounts. We tell you where we expect findings before you sign anything. No upfront audit fee.