To the electric utility, demand represents the amount of electrical power that must be available to consumers at any given time.  To the consumer, demand represents how fast they use energy and how efficiently they use it.  Demand is the amount of power needed to supply every electrical device running in your home or business at a specific point in time.  The example below may help clarify the difference between energy consumption (kWh) and demand (kW).  You will see that while the consumption (usage) is the same in both examples, the demand is greater in the example on the right.

Utilities are required by law to ensure they always have the ability to meet consumer demand.  Having capacity readily available to meet the peak demand on the grid at all times requires significant investments in generation facilities and grid infrastructure. This cost is spread across consumers (i.e. you) who may only occasionally need this capacity to meet their building operations (likely just a few hours per year).  To remain reliable in serving you with the energy your building needs, the utility must be prepared to meet the highest cumulative peak demand.

It is important to understand that the electric meter measures demand in rolling 15-minute intervals throughout the entire billing period, which is from the first day of the month to the last day of the month. For billing purposes, the highest (peak) 15-minute demand period for the month is registered.

How can a consumer reduce demand (kW) on the electrical system and lessen charges on their electric bill?

• Install energy-efficient equipment and find other ways to reduce your energy usage in business.
• Downsize your equipment to fit the job such as tools/equipment with less horse power.
• If you can, start equipment/machines at different times by waiting at least 15-minutes between each start-up.
  • For example, if you were to simultaneously operate a machine that requires 20 kW of power along with a machine that requires 50 kW, the two machines would be responsible for 70 kW on the demand meter. However, if you were to alternately operate these machines, the maximum demand reading from the two machines would only be 50 kW, because the 20-kW machine only operates when the 50 kW unit is off and, as previously mentioned, the meter only stores the highest, or “peak,” demand. With interlocks and controlling devices, it can be easy to operate some equipment this way. Remember, each kW saved is worth up to $17.00 per month (depending on your rate schedule). In the case of the two machines mentioned above, the demand savings could be up to $340 per month. There are many ways to manage demand, ranging from manual controls and time clocks to sophisticated automatic units that program and control buildings and processes for large commercial/industrial loads.

The Cooperative offers energy consulting, as well as on-site energy audits.  Energy audits are performed by trained professionals, who help identify where a building or facility uses energy and how that energy may be used more efficiently.  If you would like more information on energy audits click below or contact member services at (800) 214-2694.

Energy Audits