If you are on
a demand rate, your electric bill not only includes a Customer Charge and
Energy Charge, but it also includes a Demand Charge, which is a charge for an
electrical "demand" that occurs during each monthly billing
cycle. This charge is designed to cover part of the actual costs of providing
electricity to your home.
demand is measured in kilowatts (kW). It is a measure of the period during the
month when the greatest amount of power was required. Another way to
think about it is the point in the month when the greatest number of electrical
appliances and other loads operated at one time.
Electric Light & Power meters measure demand by identifying the 15-minute
window during which the greatest amount of energy was consumed, as shown in
this example. Assume the peak energy consumption for a home over 15
minutes during a billing period is 5 kilowatt-hours (kWh). To calculate
the average power (demand) over that 15 minutes, we use the following formula:
5 kilowatt-hours = 5 kilowatt-hours x 4
= 20 kilowatts
In this example, the home’s peak demand was a period when the average power
consumption was 20 kW over 15 minutes. This could’ve been caused by
exactly 20 kW of load operating for 15 minutes or more, or it could’ve been 10
kW for 7.5 minutes followed by 30 kW for 7.5 minutes, followed by 10 kW or less
for 7.5 minutes. Because the demand peak records the highest
over 15 minutes, the
instantaneous peak power might be higher than the
billed demand peak.
Just like our
cars are most efficient and cheapest to operate when we drive at a reasonable
and steady pace on a flat highway, using electricity at a steady rate means
AEL&P can provide that electricity at a lower cost. For that reason,
if you have good energy consumption habits in your home or business, a demand
rate may allow you to save money.
total demand charge may be high relative to your energy consumption if a large
quantity of electricity is demanded for only a short period of time. This
happens if you use many different electrical appliances at the same time and
only for short bursts. When you do this, you're asking us to ensure we have
expensive infrastructure in place to accommodate an infrequent need.
work next door to a grocery store and drive to work each day in a Nissan
Leaf. The cheapest way to get a large volume of groceries to your home
would be to take many small loads in the Leaf throughout the month. It
would be more expensive to buy a pickup truck simply because you prefer to
transport all your groceries in one trip.
If you are
curious about AEL&P’s demand rates, including our Residential Heat Pump
rate schedule, give our energy expert, Alec Mesdag, a call at 463.6303.