KWP Real Estate Cuts Electric Risk at 1101 Market with Load-Following Strategy Ahead of 2025 Capacity Hikes

Client Overview: Kennedy Wilson

Kennedy Wilson effectively addressed rising electricity costs at its mixed-use property, 1100 Market Street in Philadelphia, by implementing a proactive load-following strategy ahead of anticipated capacity hikes in 2025. Faced with escalating demands for 24/7 HVAC and lighting from tenants, the company sought a solution to mitigate exposure to peak demand penalties and seasonal usage volatility.

Bakey Energy Consulting crafted a custom procurement strategy that optimized energy purchases based on real-time usage, resulting in avoided costs of $50,000 and a significant reduction in future capacity costs. This dynamic approach not only enhanced budget predictability but also aligned the building's energy strategy with actual demand patterns, ensuring long-term financial stability for Kennedy Wilson.

The Challenge

As a leading real estate investment firm, Kennedy Wilson faced escalating electricity costs at its prime downtown property, 1100 Market Street. With tenants demanding 24/7 HVAC and lighting, and PJM capacity charges scheduled to spike significantly starting June 1, 2025, the company needed a proactive strategy to limit exposure to both:

Seasonal usage volatility in peak summer and winter
Capacity tag penalties that inflate electricity costs during grid peak demand

A fixed-rate contract would offer predictability but no flexibility nor potential to lower its costs. Full exposure to the market, on the other hand, was too risky.

Our Solution: Proprietary Load-Following + Capacity Mitigation Strategy

Bakey Energy Consulting developed a tailored, load-following procurement strategy with targeted capacity reduction components to fit the building’s real-time usage and demand profile.

Key Strategy Components:

Load-Following Energy Plan
Structured electric supply that adjusts pricing to actual hourly usage, minimizing overpayment during lower-load hours.
Seasonal Risk Hedging
Pre-summer and pre-winter partial hedges layered in for peak periods, while allowing off-peak and shoulder-season flexibility.
Capacity Cost Reduction
Implemented a peak shaving advisory program to manage PJM peak load contribution, reducing future capacity tags.
Sub-Metering Analytics
Used granular data to align energy purchases with load patterns across HVAC, elevators, and common area lighting.

Results

Why It Worked

By anticipating the June 2025 PJM capacity price hikes and designing a dynamic, load-based purchasing plan, Bakey Energy helped Kennedy Wilson strike the ideal balance between price stability and market participation. The building’s operating profile is now aligned with an energy strategy that flexes with demand—and protects the bottom line.