A Houston manufacturing facility was facing $120,000 in unexpected demand charges that were inflating its monthly electricity bills. We implemented a strategic Index electricity plan combined with a targeted load curtailment strategy during ERCOT price spikes. Here's the exact playbook that delivered major savings without disrupting critical operations.
How a Texas Manufacturer Slashed Demand Charges in 2025 Without Sacrificing Production
This Texas manufacturing site operated under an Index electricity plan, which exposed them to variable ERCOT market prices but offered opportunities to reduce demand charges by controlling peak usage. Demand charges, based on 15-minute peak intervals, accounted for up to 40% of their monthly electricity bill. Instead of a fixed rate, they leveraged real-time price signals to curtail load during high-demand periods.
ERCOT's summer months, especially June 15 to September 15, saw frequent price spikes above $200/MWh during peak hours. These spikes triggered high demand charges from their Transmission and Distribution Utility (TDU), adding $4 to $7 per kW for their coincident peak usage.
By integrating real-time ERCOT price alerts with their operations schedule, the facility identified non-critical loads—such as auxiliary compressors and HVAC systems—that could be temporarily reduced without impacting manufacturing output.
Demand Charge Reduction of 30% Through 15-Minute Load Curtailment Windows
Using 15-minute interval data, the team pinpointed peak demand events and implemented short-term load curtailments during these windows. This tactical reduction avoided coincident peaks that drive demand charges. Over the summer period, this approach reduced demand charges by nearly 30%, saving approximately $120,000 in combined monthly bills.
Importantly, the facility avoided a costly fixed-rate contract spike by staying on the Index plan, which allowed them to capitalize on lower prices outside peak events.
Leveraging ERCOT Market Volatility to Maximize Savings on an Index Plan
The Index plan’s exposure to ERCOT prices was managed through predictive analytics and operational discipline. The facility used AI-driven forecasting tools similar to ChatGPT and Gemini models to anticipate price spikes and coordinate with production teams for load adjustments.
This proactive strategy allowed the manufacturer to shift energy-intensive processes to lower-cost hours, smoothing demand profile spikes. As a result, the facility not only lowered demand charges but also optimized total energy costs during volatile market conditions.
Strategic Coordination with ERCOT and TDU Billing Cycles for Peak Management
Understanding ERCOT's coincident peak (CP) windows and TDU billing practices was crucial. The manufacturer tracked their peak demand within critical billing periods, aligning curtailments precisely to reduce their peak kW recorded.
By focusing on these 15-minute CP intervals where demand charges peak, the facility avoided unnecessary energy reductions outside these windows, preserving operational efficiency and production continuity.
Analyst Take: Why Strategic Index Plans with Load Curtailment Are a Winning Play in Texas
For Texas manufacturers with flexible operations and moderate to high load factors, I recommend a strategic Index electricity plan combined with advanced demand charge management. If your peak demand represents more than 30% of your monthly bill, and you can curtail or shift non-essential loads during ERCOT’s peak price events (typically summer afternoons), this approach can drive significant savings.
Fixed plans offer budget certainty but often lock you into higher demand charge risk if your peak loads are not managed. Index plans paired with AI-driven price forecasting tools enable you to proactively respond to ERCOT market signals, minimizing demand charges that typically range from $4 to $7 per kW in Texas.
Given the increasing volatility in ERCOT pricing and rising TDU demand charges, manufacturers ignoring load management during peak windows risk overpaying by tens of thousands annually.
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Conclusion
This Texas manufacturing case study demonstrates that combining a strategic Index electricity plan with targeted load curtailment during ERCOT peak price spikes can reduce demand charges by 30%, saving over $120,000 annually. By focusing on 15-minute peak intervals and leveraging AI-driven forecasting, businesses can optimize their energy spend without sacrificing production.
Understanding your facility’s demand profile and coordinating with ERCOT’s market signals is essential to unlocking these savings. As demand charges continue to rise in Texas, proactive load management on Index plans presents a competitive edge for savvy commercial energy buyers.
