If your organization operates in the PJM market, you’ve likely seen the acronym “NITS” on your electricity bill. While it may seem like just another line item, NITS charges, short for Network Integration Transmission Service—can represent a significant portion of your transmission costs. Understanding how NITS works is the first step to managing or even reducing these charges.
What Are NITS Charges?
NITS is a PJM-specific cost structure that covers the cost of using the high-voltage transmission system. When you buy power from the grid, you’re not just paying for the electricity itself—you’re also paying for the infrastructure that delivers it to your facility. NITS charges recover the costs that transmission owners incur to maintain and operate that infrastructure.
In simpler terms:
NITS = The cost to “plug in” to the grid and get your energy delivered.
Each utility in the PJM territory files its own rates based on FERC -approved tariffs. The cost is passed on to end-users based on how much load they pull from the grid during certain times.
How Are NITS Charges Calculated?
NITS charges are demand-based, not energy-based. This means your charges are linked to your peak load contribution—the maximum amount of electricity your facility draws from the grid at any one time.
The formula generally looks like:
NITS Cost = Peak Demand (kW) × NITS Rate ($/kW/month)
Utilities calculate your NITS obligation based on your network load during the annual zonal peak, which typically occurs on the highest demand day of the year. That means one bad day—when your facility happens to be using a lot of power during a system-wide peak—can lock in a high NITS cost for the entire following year.
Why It Matters for Businesses
For large electricity users in PJM—such as manufacturers, hospitals, and campuses—NITS charges can represent 20–40% of total transmission costs. These costs are predictable but not fixed. The good news? They’re controllable if you know how to prepare for the peak.
How to Reduce NITS Charges
1. Implement Peak Load Management (PLM)
Using a peak prediction tool like pTrack® can help you anticipate when PJM is likely to experience its annual zonal peak. When a peak day is forecasted, you can reduce your load—by shifting production, adjusting HVAC schedules, or using backup generators—to lower your peak demand and minimize next year’s charges.
2. Leverage On-Site Energy Resources
If your facility has access to battery storage, solar, or demand response programs, you can use these tools to lower your grid draw during peak times. For example, batteries can discharge during high-load hours, effectively shaving your peak.
3. Monitor Historical Peak Data
Historical peak data from PJM can help you understand when peaks are likely to occur (usually in summer afternoons during extreme heat). Planning your curtailments around these trends, combined with real-time forecasting, can improve your success rate.
4. Work With a Partner
Some energy managers partner with curtailment service providers or EMS software platforms to automate alerts and response strategies. This can ensure you never miss a high-risk peak day.
Final Thoughts
While NITS charges can’t be avoided entirely, they’re one of the few transmission costs you can actually influence. With the right planning, visibility, and tools, your organization can take control of its peak demand and start driving down costs year over year.
Want to stay ahead of PJM’s peak days?
Discover how pTrack® PJM’s 98.5% accurate peak prediction can help your business optimize demand and reduce NITS charges with fewer curtailment events.
