Basic Demand 101

Daily we talk with utility customers about peak demand issues. "What is this 'Demand Charge' and how is it calculated?" "Why does the utility issue a demand charge?", and of course, "What can I do to eliminate it?"

Peak Demand is not a well understood concept and is often confused with other electrical issues. Simply defined, Peak Demand is the highest energy usage in any one demand interval during the billing period. Most utilities use a demand interval of 15 minutes, giving the customer about 3000 opportunities each month to set their peak demand. The ONE 15-minute period with the highest energy use will set the peak demand, and thus determine the demand charge for the entire billing period.

As you can see, the challenge for customers is to try to spread out their energy usage so there are no drastic "peaks" during just a few demand intervals. The idea is to avoid getting charged a rate that only reflects one high interval, instead of the rate that reflects the customer's consistent energy use.

By using an Energy Sentry demand management system, you can set a maximum peak that you would like to stay under, and the system will automatically control different nonessential electric loads to keep energy use under the specified limit. It is sort of like "cruise control" for energy use.