by Jessica Oakley
If you’ve looked at your electric bill lately, you will find numerous line items for different charges, the two largest being Energy and Demand. So what are they and why pay for both?
Energy is power consumed over time.
If you have a 100 Watt (W) light bulb running for one hour, that uses 100 W * 1 hr = 100 Watt hours (Wh) or 0.1 kilowatt hours (kWh) of energy.
Conversely, Power is the rate that energy is consumed.
A 1000 W light bulb running for 6 minutes (0.1 hours) consumes the same amount of energy as the 100 W light bulb running for an hour-because the wattage is 10 times higher, it uses that energy 10 times faster.
Utilities have to ensure they have the capacity to provide not just the quantity of energy you need, but also deliver it at the speed you consume it.
So why charge me for demand instead of power?
Many large pieces of equipment have a high power draw when they first turn on. This power draw could be several times the amount of power it uses once it is operating, but it typically only lasts for a second. The utilities can average out some of these very brief spikes over their thousands of users. What they measure instead is the average power you use over a slightly longer period of time, typically 15 or 30 minutes. This average power value is defined as demand. For medium to large commercial customers, utilities bill the highest demand value for the month as peak demand.
In much of the US, energy usage is seasonal and so utilities look to their annual peak load to plan for capacity. Utilities in these locations may implement a ratchet charge which shows up on your bill as billing demand or facilities charge. This allows the utility to charge its customers not just for our monthly peak demand, but also for our highest monthly demand for the past year. These can go up and down depending on the energy efficiency of your home, which can be worrisome to those who are minding their financial output, so it may be best to look around the home and see where energy may be leeching out from and get that sorted as soon as possible. This could be through windows and doors in Denver services, or a company closer to their location, so you can make sure you are only paying for the energy that you use.
It is important to remember to turn up your thermostat a few degrees higher in August, or you may still be paying for summer’s cold AC in February. As well as this if you have noticed that your electric bill has begun to get increasingly higher then perhaps there is something wrong with your electrical system, your home warranty arizona, or wherever you have your warranty assigned to, should provide coverage for this issue so that you can lower the price of your future electric bills.
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7 years ago
[…] on the correct utility tariff (which determines the rate you pay). Regulated utilities typically offer anywhere from 3-10 tariff options for their commercial customers. It’s important to properly match your electric needs profile […]