From healthcare and higher ed to logistics and manufacturing, commercial and industrial (C&I) customers face an increasingly volatile energy landscape.
Between 2019 and 2024, commercial electricity prices rose 19%, reaching 12.8 cents/kWh, while industrial rates climbed to 8.1 cents/kWh. Extreme weather, rapid load growth, shifting fuel regions and geopolitical pressures have amplified price volatility, with limited signs of a near-term reversal.
For companies that take no action, higher energy costs are not merely a possibility — they are a certainty. Traditional energy procurement and efficiency strategies alone are no longer sufficient to manage these risks, leaving C&I customers increasingly exposed as margins grow harder to protect and costs become harder to predict.
Distributed Energy Resource Management Systems (DERMS) provide a strategic path forward. DERMS are software platforms that help companies monitor and control decentralized energy assets, such as on-site generation, storage and flexible loads. This enables facility or energy managers to optimize energy use in real time — lowering peak demand charges, reducing overall energy spend and improving asset performance. DERMS also enhance operational resilience by providing backup power when the grid is down.
With the added ability to participate in local energy markets, DERMS can transform distributed assets from passive infrastructure into active financial and resilience tools, aligning immediate cost control with long-term business continuity.
The hidden costs of energy volatility
Energy volatility is often framed as a pricing issue. Capacity charges have increased by more than 70% since 2024 in parts of the U.S., according to Steve Shearson, Senior Business Development Manager at Caterpillar. Capacity and transmission make up approximately 20% to 30% of a C&I’s electricity bill, he said. Mitigating the increase in capacity and transmission cost is manageable with DERMs, real-time market intelligence, and an onsite energy asset or flexible load.”
In practice, however, volatility has become a margin and operations challenge. Tight margins may force multi-site customers to shift production to facilities in more stable energy markets, leaving higher-cost plants vulnerable to curtailment. Single-site customers have fewer options, potentially scaling back production, delaying investment or even passing costs downstream.
There is also an opportunity cost. Capital redirected to absorb unexpected energy increases is capital not invested in modernization, maintenance or growth. Over time, volatility doesn’t just raise costs; it reshapes production decisions, investment strategy and long-term competitiveness.
Take control of energy costs
In this volatile environment, C&I customers need predictability, automation and clear visibility into how existing or new distributed generation assets can be leveraged to deliver on-bill savings and market revenues directly to the bottom line. A DERMS delivers that information.
A DERMS is an advanced software platform that monitors, controls and optimizes distributed energy resources (DERs) individually or at the fleet level. Using real-time data, forecasting algorithms and automated controls, it provides facility managers with insight into facility load, market pricing signals and the performance of on-site generation and flexible loads.
Signals move system-to-system, ensuring connected assets respond automatically when the grid calls for the support of behind-the-meter generation or when economic thresholds are met. Auto-dispatch capabilities eliminate the need for facility teams to manually start generators or adjust systems, reducing “dispatch fatigue.”
At the same time, continuous monitoring of equipment health helps improve resilience, preventing unplanned downtime and ensuring resources are ready to provide backup power in case of a grid outage.
Ultimately, generation assets and an effective DERMS give facility managers something volatility erodes: options.
Monetize DERs with DERMs
Turning DERs into financial assets starts with understanding their value. An experienced energy service advisor can conduct an energy evaluation to quantify potential savings, recommend asset type and size, and build a step-by-step plan to optimize results.
For many C&I customers, the impact is significant. Depending on the asset mix and operating profile, customers often see energy spend reductions of 20% to 30%. In certain ISO or utility territories, the annual financial impact can range from $50,000 to $300,000 per megawatt-year — derived from a combination of on-bill savings and market revenues.
Peak tag reduction is a clear example. “In some areas in PJM, a megawatt-year is worth about $250,000. If a facility sets a two-megawatt peak, that can translate into approximately $500,000 in annual transmission and capacity-related costs,” Shearson explained. Using a DERMS platform in coordination with dispatchable generation to reduce that peak as close to zero as possible can materially lower that obligation, avoiding hundreds of thousands of dollars in annual charges.
Unlike some DERMS that simply monitor assets or only send market signals or predictions, Caterpillar’s Active Management Platform (AMP) can also generate new revenue by enabling asset participation in local energy market programs. Cat AMP’s Network Operations Center (NOC) monitors distributed generation assets and power markets around the clock, tracking both price and demand signals. As a Registered Curtailment Service Provider (CSP), Caterpillar automatically bids and seamlessly dispatches generation to the grid when market opportunities arise.
Importantly, customers can realize these savings and revenues without disrupting normal operations. “Facilities shift between grid and generation for economic reasons without operational interruption,” said Shawn Borden, a senior technical sales specialist at Caterpillar. “This strategy does not require customers to curtail load and impact their operations; it serves customer load from the on-site generation asset, rather than the grid, during times of economic opportunity.”
Put DERMS To Work for You
Monetizing distributed energy begins with a single conversation with a Cat Energy Services Advisor. By asking the right questions, they work to understand the specific challenges a C&I customer faces: how energy costs affect budgets, operational goals and performance within their local market structure and programs — and from there, recommend a clear path forward.
Advisors first assess whether existing assets — such as gensets or batteries — are already on site. If they are, customers can unlock the value of that existing distributed generation by integrating a DERMS platform with the necessary switchgear, controls and command center access. This enables automated dispatch and opens up market participation opportunities.
For facilities without existing DERs, Cat Energy Services Advisors can analyze energy bills, site configuration and local market programs to propose a solution that maximizes economic returns — whether that's a turnkey installation, an asset replacement or a no-capex Power Purchase Agreement (PPA).
The PPA model allows C&I customers to preserve capital for core business investments while leveraging the economics of distributed energy to fund the project. Contract structures can be flexible, combining fixed fees with shared savings or revenue participation.
For example, Linamar Corporation deployed 15.5 MW of behind-the-meter generation and a Cat AMP DERMS via a PPA. The system will help reduce peak energy costs for several of Linamar’s Canadian manufacturing sites.
Whatever the starting point, the process is the same: an honest look at what's there, what's possible and what will deliver the strongest financial outcome for the business
Power Projects That Work Today and Are Scalable for Tomorrow
Caterpillar Energy Services offers end-to-end solutions backed by a 100-year legacy and a nationwide dealer network, ensuring equipment and support are always available. From DERMS platforms to turnkey generation assets, Cat offers financing options and shared-savings structures that deliver both operational resilience and financial value. Learn more here.
