System Reliability

Connecticut is part of a regional electric system (grid) that serves the six New England states.  The entity responsible for keeping electricity flowing across the grid is the Independent System Operator of New England, the ISO New England, Inc. (ISO-NE). ISO-NE plans and operates the electric grid to assure system reliability. ISO-NE's planning includes having enough power plants (generating capacity) and transmission lines available to meet the maximum load (peak demand) that customers place on the grid. The highest annual demand for electricity in CT, the system peak, generally happens during hot weather when the use of air conditioning increases. ISO-NE needs enough generating capacity to meet the system peak plus a cushion of additional capacity for contingencies.  The ISO-NE uses the system peak demand in its system planning for future generating capacity needs.

Generation Supply Costs

The total cost to provide generation supply from Eversource, United Illuminating or licensed suppliers includes two main components:

• Fuel to produce electricity, a variable cost, and,
• Capacity, the fixed, capital cost of power plants and transmission to deliver the electricity. The cost of generating capacity in New England has increased the total cost to provide generation supply. 

Generating Capacity & Peak Demand

Some of the generators that are built for system reliability and peak demand operate during relatively few hours of the year. The cost of this generation is included in all generation supply rates. Eversource, UI and licensed suppliers pay capacity costs based on the estimated peak electric demand of their customers. Consumption (expressed as kWh) is the amount of energy used over a period, such as a billing cycle, month or calendar year. Demand (expressed as kW) is a measurement of the use at a single point in time. 

It is more expensive to serve customers who have a high demand (e.g., spike in demand) and use relatively few total kWh when compared to a customer with the same demand who uses electricity more evenly across the year. Like any product or service, the unit cost is lower when fixed costs are spread over more units. In this case, the rate per kWh.

Load Factor

The way customers use electricity, the relationship between their demand and consumption, is called load factor. Suppliers can offer a lower rate to customers with a higher load factor 'score' and use customer-specific information such as your estimated demand during the system peak, called an ICAP Tag and annual consumption to estimate this score.  The load factor score is then used to determine whether you qualify for the rate. A more detailed explanation of load factor is provided below.

Installed Capacity 'ICAP' Value - Customer ICAP Tag

Eversource and UI calculate an ICAP Tag for each customer or group of customers. The current ICAP Tag represents the contribution that an account (meter) made to the system peak. The ISO-NE capacity year runs from June 1st through May 31st of the following year. New ICAP Tag values are calculated in the spring of each year, using the peak load contribution from the previous calendar year.  

More About Load Factor

Load Factor is a useful indicator for describing the variability in customers' demand for electricity. Here's an example:

A residential customer has a demand of 10 kilowatts (kW) during the annual system peak; the peak hour of the peak day. The customer may be using all their electrical devices such as lights, televisions, computers, ceiling fans, central air conditioning, pool pump, dehumidifier, dishwasher and clothes dryer at the same time during peak demand periods which typically include the system peak hour. The customer generally does not use these appliances at the same time but did so during these peak demand periods and realized a demand of 10kW.

To calculate the Load Factor we need to know how much the customer would have used if he used this amount of electricity throughout all hours of the year, 24 hours a day for 365 days. This would be a constant demand of 10 kW. To find this value, multiply the customer's system peak demand (10 kW) times 24 hours times 365 days - the customer would have used 87,600 kWh (10 kW x 24 hours x 365 days). The 87,600 kWh is the potential use. If the customer used 87,600 kWh during the year he would have a Load Factor of 100%, calculated as the actual use, 87,600 kWh divided by the potential use, 87,600 kWh, which in this example equals 1 or 100%.

Presume that the customer actually used 14,800 kWh during the year. To calculate the customer's actual Load Factor, divide the actual use, 14,800 kWh, by the potential use, 87,600 kWh. This equals a Load Factor of about 17%, a relatively low Load Factor. The Load Factor can be viewed as a score; lower number, lower score. A low Load Factor indicates high variability in customer demand for electricity compared with the customer's overall electric consumption. In this example, the Load Factor shows that the customer placed a relatively high demand for electricity on the system for a relatively short period of time and did not use electricity at that level of demand over an extended period of time.

How to Improve Load Factor

Continuing with the same example, if the customer reduces his system peak demand by not running all of the appliances at the same time, or running for instance the pool pump, dehumidifier, dishwasher or other devices when the overall demand for electricity is lower, or using more efficient equipment, the customer's peak demand could be reduced from 10 kW to 5 kW as a result. The customer's potential consumption at a 100% load factor would be 43,800 kWh (5 kW x 24 hours x 365 days). Using his actual consumption of 14,800 yields a Load Factor of about 34%, higher than the previous Load Factor of 17%.

It is important to know that regardless of the electric supplier you choose, Eversource or UI will deliver your electricity, bill you for service, and respond to power outages. Only Eversource or UI can terminate your service.

Take your time when reviewing available offers.

By shopping for competing suppliers, you may be able to save money and/or find suppliers that use clean, renewable energy resources. As you shop for electric suppliers think about what is most important to you. Read offers carefully and ask questions before enrolling. Like any offer, you should be sure you know and like the terms before signing up.  Remember, remaining with the Standard Service rate could be the best option for you. 

Consider asking suppliers the following questions:

• What is the length of the contract?
• Is there a cancellation fee?
• What are my monthly savings if I switch?
• Will the contract automatically renew at the end of the term?
• How much notice must I give if I don't wish to renew?
• How is the electricity generated – coal, gas, nuclear, hydroelectric, etc.?
• Is the generation provided from renewable sources?
• Where does the renewable portion come from?
• Is a security deposit, enrollment, or other similar fee required?
• Is there a credit check, late payment fee, or other similar fee assessed? (If yes, be sure to get a list of the charges and what each charge will cost.)
• Do you offer any other services? (Some examples include energy assessments, conservation services, load management, or other energy-related services.)

For more information, speak to an energy professional at Connecticut’s Energy Information Line at (877) WISE‑USE (877-947-3873) or call the Public Utilities Regulatory Authority's Consumer Affairs Unit at (800) 382-4586.

Frequently Asked Questions About Choosing A Supplier

For more information, speak to an energy professional at Connecticut’s Energy Information Line at (877) WISE-USE (877-947-3873) or call the Public Utilities Regulatory Authority's Consumer Service Unit at (800) 382-4586.