You really have to understand the wholesale power market to figure out what is going on with the "beat the peak" programs being initiated by many poco's these days.
Especially, when it comes to dealing with poco's on the PJM interconnection grid, such as you have in Maryland.
Electric power is sold in wholesale lots on a monthly basis, and there are surcharges that can be assessed during what is known as the peak critical hour
during any given month.
The problem is figuring out exactly which hour of the month was the absolute peak in terms of kWh used.
For you see, this is determined on a lookback basis, once the month has ended. The surcharges are assessed after the fact.
It becomes a game of cat-and-mouse in some cases.
So, power companies are instituting programs that can cut back on their usage during times of peak demand of electricity. In the summer months, this usually occurs in the afternoon of hot swealtery days. The hours of 2-7 was mentioned, but the critical hour usually occurs between 3-6 pm.
In winter, this can occur in the morning hours of 7-9 AM, or 5-8 PM, also depending on the severity of the weather.
These surcharges can be 10 times or more of the regular cost of providing electricity. Investments in technology such as peak demand load controls, or smart meters can have a short payback period when dealing with costs of a dollar or more for each
kWh during the critical hour.
The poco is essentially selling electricity at a huge loss during those time periods.
I have been on a 3-tiered time-of-use rate for over 10 years on my local coop, so I am quite familiar with how such programs work. My 3rd rate is what I call "high dollar" (over $1.90/kWh) and is only instituted during those times seeking the critical hour.
The payback I get from being on the program is reduced rates during normal peak and off-peak times.