Understanding Demand
What is Demand?
How does it affect my power bill?
Demand energy is increasingly becoming a part of our power bills, so I wanted to explain it in further detail.
What is Demand?
Demand is the maximum amount of electricity required at any point in time to serve the load, (total customer usage). This is the combined amount of energy required to serve the load. For example; when you turn on an electric stove, the clothes dryer, and the electric water heater cycles all at the same time it causes an increased demand on the system in order to send power to all of those appliances. Running several grain bin fans and augers simultaneously is another high demand on the system. You are setting a higher peak demand than if you staggered the usage or spread out the usage and only ran one at a time. Most distribution utilities, including Stanton County PPD are charged for demand by their wholesale providers. Therefore, utilities set a similar peak demand to individual customers.
How To Charge for Demand?
Generally speaking, there are a couple of ways to recover demand charges. They can be blended in with the energy charge, or it can be metered and separated out or “unbundled” as a stand-alone demand charge. A separate demand charge is the best way to account for these charges. You see, when demand is blended into the energy charge, it requires an average demand cost to be added to the average energy charge. This method creates winners and losers. If your individual demand is higher than the average, then you are not actually paying the true cost created by your demand. If your demand is below the average, then you are over paying.
Many utilities, including Stanton County PPD, are transitioning toward unbundling the demand charge. When this unbundling happens, the demand charge is itemized and the energy rate is reduced to keep from overcharging.
Can My Demand Be Reduced?
Demand can be reduced by spreading out the usage of appliances throughout the day. Programmable thermostats can shift heating and cooling to run more efficiently. An example would be running the dishwasher overnight when lighting and water heater loads are typically off. You can also make sure to unplug unused electric devices when they are not needed. We use irrigation load control to reduce our overall system peak demand reducing the demand charges we receive from our wholesale provider. Some of our large commercial and large power loads currently have demand charges itemized into the rate. We are looking at moving the remaining rates to this format beginning with seasonal rates. Chad Waldow – CEO
