Bob Pierce answers questions about energy-efficiency, consumer products, and cooperative governance. He is Clearwater Power’s Chief Operating Officer and welcomes your questions on our Ask Bob page.
Q: What is an electric demand charge?
A: Electric demand is a measurement of the maximum amount of power used at a specific moment. It is different from energy charges which measure the total used over time.
Demand (sometimes called peak demand) is a measurement of the peak impact on our electric system to deliver power. The more appliances operating at one time, the higher the demand. It doesn’t matter how long they’re on, it only measures the “highwater mark.”
In the home, people tend to have a peak time of electric use each day in the mornings (getting ready for work and school) and in the evenings when returning home. At these times, there is a greater demand for energy.
For the utility, the system must be built to meet these peak demand times, while most of the day, the demand for power is far less. Some of our costs are based on total energy consumed, some costs are fixed and some costs are based on peak demand.
In an effort to make power bills more equitable, Clearwater Power is considering separating a small portion of the demand charges from energy charges. This change may actually lower the energy charge. This would allow us to better balance some of the costs that are directly related to demand, rather than total energy consumption.
This type of rate structure would offer greater transparency and control over your total charges. The impact of separating the demand charge from the energy charge would vary from customer to customer resulting in increases or decreases of amounts ranging from around $1 to $6 each month.