“What is Demand” and how are you billed for it. To recap, most commercial customers and some residential customers (depending on the utility) are billed a “Demand Charge”. The Demand Charge is the amount you pay, per kW, during the billing month for the “Peak Demand.”

The Peak Demand is the highest kWh usage in any demand interval (usually 15 minutes) during the billing month. It determines not only your Demand Charge but may also determine what rate you’re placed on by the utility.

The utility’s meter records and averages your kWh use for each of those 15-minute intervals and the interval with the highest 15-minute usage, in that billing period, sets your peak demand for that month.

Key Points:

  • The initial spike in energy use caused by turning on a machine (LRA) lasts for a very brief period, typically a few seconds. Energy use then drops to the static load size (RLA).
  • The turn-on spike has very little effect on the total amount of energy use calculated in the 15-minute interval because it occurs for such a brief period of time.
  • Peak Demand is determined by the highest kWh usage in any 15-minute demand interval within a billing month.
  • The real “Peak Demand” is a result of having a 15-minute interval where there were coincidental maximum number of loads operating simultaneously. (“Too many loads on together for too long”)
  • There are approximately 3,000 15-minute intervals in a typical billing period, in other words 3,000 opportunities to set your Peak Demand. (Most utilities use 15-minute intervals, some use 30 or 60-minute intervals.)
  • When studying Peak Demand it is essential to take into consideration all the electric loads in operation and when they are operating.

Call Energy Advisors today if you’d like to know more about Peak Demand and how to save energy on your electric bill. You don’t have anything to lose! 757-412-2910.