Critical Peak Pricing (CPP)

Critical Peak Pricing is a dynamic electricity rate structure designed to incentivize reduced energy consumption during periods of peak demand. Under CPP, utility companies impose significantly higher rates for electricity during designated critical peak hours, which are limited to specific days, often 10 to 15 per year. These peak prices, which can range from three to 10 times the usual rate (Form EIA-861 Instructions), aim to encourage consumers to adjust their usage patterns to alleviate stress on the electrical grid and reduce the reliance on expensive and less environmentally friendly power generation methods.

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