Learn About Demand Rates

Appointments: (602) 867-3176

Transfer-Manage-Save

If you don't understand how demand rates are charged it's difficult to understand how to save with one

What is a Demand Charge?

Helping unravel the mysteries of demand charges since 1980

Demand and Consumption

The difference between demand (kW) and consumption (kWh) is vital to your choices in reducing your energy costs. A simple way to see the difference between demand and consumption is by considering two examples.

 

LIGHTING EXAMPLE
One 100-watt light bulb burning for 10 hours consumes 1,000 watt-hours or 1 kWh. The entire time it is on, it requires or "demands" 100 watts or 0.1 kW from the utility. That means the utility must have that 0.1 kW ready whenever the customer turns the lamp on.

Similarly, ten 100-watt light bulbs burning for 1 hour consume 1,000 watt-hours or 1 kWh. Note that in both examples, the consumption is 1 kWh, however, look how differently the second situation impacts the utility from a demand perspective. The serving utility must now be prepared to provide ten times as much 'capacity' in response to the "demand" of the 10 light bulbs operating all at once. If both of these customers are billed for their consumption only, both will get the same bill for 1 kWh of energy. And that is the way most residential customers used to be billed. Now, both SRP and APS bill for their hourly consumption patterns and their peak demand for energy. These customers often have special meters that measure both that just record total consumption and what was consumed in a time period. For residential APS users this time period is 60 minutes. SRP solar customers have a 30 minute demand window. 


CAR RENTAL EXAMPLE
Imagine you own a car rental company. To capture how your customers are driving your cars a demand speedometer is installed. A demand speedometer would have two needles, one showing how fast you are going (like a regular speedometer) and another needle that records the fastest speed the car was driven.
When the car is returned and the demand needle is registering 70mph it shows the car was not abused.

If the demand needle is registering 120mph it depicts how fast the car was driven at one point in time.  
The speedometer is then reset back to zero for the next rental customer.
Likewise, the recorded highest demand is reset back to zero each month after the meter is read.  You start each month back at zero kW.
The time periods for measuring demand are as follows (the following applies to utilities in Phoenix Arizona)
APS: 60 minutes
SRP Residential Solar Customers: 30 minutes
APS and SRP Commercial Customers: 15 minutes
 

HOW DEMAND IS BILLED

As you have just learned, electric power use is metered in two ways: on maximum kilowatt use during a given time (kW) and on total cumulative consumption in kilowatt hours (kWh).  
Your energy bill is a combination of kW (demand charges) and kWh (how much power you used in addition transmission charges, taxes etc.
In many homes the demand charge can be the largest contributor to a high bill, this is why managing your demand level is important. 

Understanding Time of Use Rates (TOU)
TOU rates have two different rates based on time frames called "On Peak" and "Off Peak".
Energy consumed during off peak hours is considerably less than on peak and there is no demand charge.
APS TOU structure: 3pm-8pm Mon-Fri is on peak. All other times are off peak including holidays
SRP TOU Structure: 1pm-8pm Mon-Fri is on peak (summer rates)
 5am-9am and 5pm-9pm Mon-Fri (winter rates)
 Summer rates: May 1st - October 1st

Planning on when you use power can significantly reduce your monthly bill. Using large energy users during off peak times and pre-cooling your home before on peak starts are good strategies for shifting more power to off peak than on peak. 

 Installing a quality demand controller takes the worry out of appliances running at the same time during on peak hours. Like a cruise control for your car, a demand controller is used to set a max peak demand level or threshold and through relays connected to the controller will automatically cycle loads on and off to prevent high demand levels.
 

What you can to everyday

After fully understanding how demand is charged it becomes easier to adjust your lifestyle to adapt. 

During on peak times you want to limit how much energy you use. Plan on using hot water, washing and drying clothes and using the AC during the inexpensive off peak times. 

As mentioned above, pre-cooling the house colder than you typically like it "cold soaks" the walls/furniture/counters which absorbs heat during the off time and helps to maintain comfort.  Pre-cooling must be done several hours before on peak starts as it takes time to remove heat. Four to five hours of pre-cooling is recommended.

 

If you have ceiling fans it's best to shut them off during on peak hours as the load controller has a limit of kW reached.  When eight ceiling fans are running at the same time it takes the allotted amount of demand programmed into the load controller and will leave you short of hot water or a house that gets too hot during on peak times.
This is also true of pool pumps and other energy users that can (and should) be moved to off peak hours.

What you can do everyday

After fully understanding how demand is charged it becomes easier to adjust your lifestyle to adapt.   Small changes mean large cost reductions.

During on peak times you want to limit how much energy you use. 

Plan on using hot water, washing and drying clothes and using the AC during the inexpensive off peak times.

Pre-cooling the house colder than you typically like it "cold soaks" the walls/furniture/counters which absorbs heat during the off time and helps to maintain comfort.  
If you have ceiling fans it's best to shut them or if you feel you need to use one use the one in the room you are in.  Ceiling fans do not save energy, they consume it.  Running six or more continuously can be instrumental in creating a high demand charge and not allowing the a/c or water heater to run long enough.
This is especially true if you have a load controller.   


See the Difference

image79

When you open your utility bill each month, rather than just scan down to see how much you have to pay for your comfort, look at the bill.  
Look at on peak usage compared to off peak.  Look at the percentages and remember what it is.  Shoot for 85% off peak and 15% on peak as a goal.  

Watch each bill change as the seasons change and above all, look at your demand level.  Lowering demand helps you save money and helps the utility to keep their costs down by not having to build peaker plants just for demand.  


HELPFUL LINKS
For additional information on load controllers click here

Learn about our "Demand Reduction Package" click here

Looking for real savings on your SRP or APS bill?  More>>>
Learn how you can cut your energy bill in half and have more comfort.
Click here

Subscribe

Sign up to hear from us.

Demand Reduction

How to take control of your demand charges

 

Dencor Load Controller

image80

"Set it and forget it"
Once a Dencor Load Controller has been installed and programmed it becomes a money machine.   It does this by keeping your hard earned money out of the hands of the utility company by reducing monthly demand charges.
No monthly fees, cloud based and runs by itself and never needs maintenance.   


Digital Programmable Timers

Keep your hot water heater and clothes drying from running by installing a digital timer.

Keep your water heater, clothes drying, fountain effects or other large energy users from running during on peak times .
A programmable timer is the perfect solution, call us for a quote


Some of our Products

image81

Thermal Control Membrane

This isn't your ordinary radiant barrier product, this is TCM.  
Best insulation product in the world and the only one with a lifetime performance warranty

image82

Tubular Skylights

Bring in utility free pure spectrum sunlight but none of the heat with a tubular skylight.
We specialize in residential and commericial installations. 
 

image83

Energy Audits

If you want more comfort and want to spend less for it find out where heat is escaping or entering with an energy audit.  

A BPI trained energy auditor will bring an infrared camera and show you in real time things like low, under performing or missing insulation in your walls and ceiling and determine how efficient your HVAC system is running.
If you are considering installing solar panels "REDUCE THEN PRODUCE"

Contact Us

Please contact us directly with any questions, comments, or scheduling inquiries you may have.

Automated Power Systems

610 East Bell Rd, Suite 350, Phoenix, AZ 85022, US

(602) 867-3176

Hours

Monday - Friday: 7am - 7pm

Saturday - Sunday: Closed

Send Message

Cancel

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.