One way to understand demand charges is to consider an example–imagine a single light bulb running for 10 hours. Now imagine 10 light bulbs running at once for 1 hour. Both situations use the same amount of electricity, but running 10 light bulbs at once increases the load demand on the electricity grid. This makes it more expensive for us to maintain the supply of energy. In some rate plans, your business can incur costs for the extra demand.
Demand charges are based on the highest amount of electricity used within any 15-minute period during your monthly period (referred to as “Facilities-Related Demand”) and/or on your highest amount of electricity used within a specific TOU period during your monthly billing period (referred to as “Time-Related Demand”). The unit of measurement used is kilowatts (kW). Energy charges are based on the total amount of electricity used in each TOU period within a billing cycle. For energy charges, the unit of measurement is the kilowatt hour (kWh).
Learn more about Time-Of-Use Charges >