A cap tag is a measure of a customer’s electricity usage when the overall demand on the grid is high. More formally called a PLC (Peak Load Contribution), it is a kW value during the hour or hours, depending on the ISO when the grid is at its annual peak load. These peak hours occur during the summer and then drive a customer’s costs for the following June to May year. The grid operators need to ensure that there is enough generation capacity in the system to produce power at high load times so the load is charged based on their contribution to the system peak. Cap tags affect overall energy pricing and determine how much a customer pays for capacity during the year.