What is Power Demand Factor (PDF)?

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Make sure you know your organization’s PDF.

You know when your business is operating at peak efficiency, but do you know what your business’s PDF is? No? Not that one! PDF stands for Peak Demand Factor, and is a significant number for determining your energy expense in Ontario. Just remember that PDF is only one name for Demand Factor (DF), other jurisdictions use different terminology (e.g. PJM uses the term ICaP (Installed Capacity) tags).

Before we get to PDF, let’s just quickly look at what Demand Factor means. Demand Factor refers to the ratio between the total amount of demand in a system (or part of a system) relative to the system’s total connected load. This means the Demand Factor is always represented as a number less than one.

Demand Factor never goes above one because that would mean the grid is supplying more energy than it has, which leads to blackouts and grid shutdown.

PDF relates to the IESO’s Industrial Conservation Initiative (ICI), which comprises Class A and Class B customers. Class A customers pay Global Adjustment (GA) fees based on their share of total Peak energy use.

Ontario uses a five coincident peak (5CP) framework, so the five most energy-intensive hours of a given year set the GA prices for the following year.

This is where PDF comes in; it signifies a company’s portion of the total Peak usage. For example, if your company used 19.8 MWh over the previous adjustment period’s five Peaks, and total provincial energy usage was 110,578.32 MWh then you divide the second number by the first number to get your PDF (in this case 0.00017906).

This number may look insignificant, but given that Ontario sees almost $1 billion in monthly GA costs, even a relatively small PDF can lead to substantial financial outlays if you aren’t proactive and do not respond to Peaks.

In this example, we multiply total GA costs ($998 million) by our PDF (0.00017906) to get our monthly GA bill, in this case $178,988.38. No one likes six-figure energy bills. If you just sit back and accept the status quo, then all you’re doing is giving PDF another meaning – pretty depressing finances.

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