kW demand billing, it's there on your electric bill each month, but what is it?
You've come to the right place to get the answer. Keep reading and we'll uncover the mystery.
In our last post, we learned that ten 100-watt light bulbs operating simultaneously require 1,000 watts or 1 kW of electricity. When we flip the switch those bulbs demand one kilowatt of power. When we flip the switch off, the electricity stops flowing and the power demand for those bulbs drops to zero.
Kilowatt Demand, like miles per hour (mph) is an instantaneous measurement so it helps to visualize the speedometer in your car when we think about this calculation. Your speedometer tells you how fast you are going in mph. Pressing your foot on the accelerator will cause that number to go up, just like turning on more lights can increase electrical demand.
The kW Demand you see on your bill each month reflects the highest average demand pulled through the meter over a 15-minute period during the month. The speedometer is helpful in visualizing this calculation.
Lets assume you are traveling on the interstate at 70 mph for 7 1/2 minutes and you come to a construction zone where you must lower your speed to 50 mph for the next 7 1/2 minutes. Your average speed for the 15 minutes of driving would be 60 mph. The electric meter is performing a similar calculation when it measures your kW demand.
Now, think about our light bulbs again and imagine that instead of ten, we now have twenty. The twenty 100-watt bulbs demand 2 kW of power to operate. If we leave them on for a full 15 minutes our meter will register a demand of 2 kW. If we turn them off after only 7 1/2 minutes, the the average demand for the 15 minute window will be 1 kW.
Your electric utility has to be ready to serve your highest demand for electricity whenever it happens. This means the transformers serving your facility, the wires bringing the power to those transformers and even the generators in the power plant all must be large enough to answer your demand for electricity whenever it occurs. Utilities use demand charges to recover the cost of the investments made in those physical assets. So the items on your bill that are billed per kW are paying for the costs associated with the physical assets the electric company has in place to serve you.
Still have questions? Call us at (813) 917-8952 and let us help with an answer.
Hello, I'm Kent Hobart and I'm different. I've been blessed with a knowledge of utility billing and rate structures that is rare and yes, a little weird.
I started Utility Refund Specialists as a way to use my unique skills in serving organizations like yours. We audit our client's utility bills and identify errors in the billing that earn them refunds from their utility providers. I know, it sounds crazy but 3 in every 4 clients we work with have errors in their bills.
The incidence of errors is so frequent, and the refund amounts are large enough, it is worth our time to perform the audits for free. We only get paid after we secure you a refund!
Interested in learning more? Use this link to set up a 30- minute discovery call. Want to talk sooner, give me a call at (813) 917-8952 or send me an email.
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