All commercial small and large power rate classes are billed under a three-part (demand) rate. The rate structure breaks apart the traditional blended rate to include a Grid Connectivity charge, Energy Charge, and Demand Charge component. The following information will help members better understand demand as it relates to their energy use.
So, what is demand?
Demand refers to the maximum amount of electrical power that is being consumed at a given time, as opposed to energy which is the amount of power used over a period of time.
The Demand Charge line item that appears on your monthly bill represents the 15-minute interval with the highest amount of electricity used during that billing month – measured in kilowatts (kW).
If you're wondering about the "demand charge" line item on your electric bill, you're not alone. In this video, we use simple real-life examples of a small business and a large business and how you can control your energy demand.
Demand Rate Frequently Asked Questions
Demand is the amount of power needed to supply every electrical device running in your business at a specific point in time. It is the maximum rate at which your business has consumed electricity.
Demand has already been a part of every electric bill! Every household or business using electric service has “demand”.
Traditionally, demand has been included and paid for as a part of the kilowatt-hour charges (kWh) that each member pays for. The demand component has always been bundled with the energy charge, but now with affordable and smart technology, we are able to measure demand and bill separately, giving members the opportunity to control it. This additional information allows us to break apart the various components of your electric bill and charge you more fairly for the two largest drivers of your electric consumption: your impact on the electric system (your demand) and amount of power you consume (your energy use).
Unbundled charges for demand more fairly distribute the costs of providing service to those members who use large amounts of electricity at one time.
The more appliances, equipment or devices you run at the same time, the higher your electricity demand.
Depending on your business, your demand will vary, and your highest demand season may be different from other members.
- In the summer months your demand may be higher due to air conditioning, freezers, pumps, fountains, motors, power tools and compressors.
- In the winter, demand is driven by electric heat or space heaters, stock tank heaters, crushers and increased usage for lighting.
Understanding the wattage ratings of your equipment will help you take even more control of your energy bill. Listings of common wattage ratings can be found online and you can estimate costs of running equipment by using our online energy calculators.
Staggering the use of major appliances is the easiest way to manage your energy and demand charges. When you consistently stagger the use of major appliances or equipment so they don’t run at the same time, you can keep your demand low.
- Make it easier by utilizing technology that helps you remember to offset energy use like timers, delay start settings, mobile apps and programmable thermostats.
- Evaluate your operations to even out or lower demand. Consider shifting energy use to different time periods, staggering the use of heavy equipment to eliminate spikes in demand, and using equipment at a lower intensity.
Commercial Small Power — Demand information sheet below (for other tariff options, please visit gvp.org/rates for specific pricing):
Your electric bill includes your total demand. The Demand Charge reflects your highest 15-minute interval of energy consumption during that billing period, which is measured in kilowatts (kW). Line items associated with both your Demand and Energy consumption reflect the total measured usage and total cost of each component.
SmartHub, our online account management portal and app offers you an hourly, daily, and monthly look at your past and current energy use. Log in anytime to view your energy and demand on an easy-to-read platform. Learn how to register for your online account or download the free app.
