Understanding Demand Charge

  • What is demand?

    “Demand” is the total amount of electricity being used by a member at any one time. Demand varies from hour to hour, day to day and season to season. This use, which is expressed in kilowatts (not kilowatt-hours), is called “demand” on the system. Baldwin EMC monitors demand over a 15-minute period. The member is charged for the highest 15-minute average recorded on the demand meter. After Baldwin EMC reads the meter each month, demand is reset to zero and the meter starts over, recording the highest 15-minute average for the next billing period.

  • Why are demand charges used?

    Demand charges are the way your cooperative pays for generation and distribution capacity it needs to meet peak demand that occurs from time to time. The demand charge your cooperative pays to its wholesale power supplier is also calculated on the basis of the highest demand during the month. BEMC uses the same method to bill demand to its demand-rate members.

  • Are demand charges unique to BEMC?

    No; demand charge billing is used consistently in the electric utility industry.

  • How can demand charges be reduced?

    To reduce demand charges, examine your operation. Try using our Energy Usage Analysis. Requires Adobe Reader. Click here to download for free.

  • What energy efficiency improvements can be made?

    Examine your business: Does all of the equipment need to be running at the same time? If not, what can be turned off while other equipment is running?

    Often there is equipment that is operated infrequently. If this is the case, can some other equipment be turned off while this equipment is running? The result may be a significant savings in your monthly demand charge.

  • What else can be done to reduce demand charge?

    Consult with BEMC to help evaluate ways to improve the energy efficiency of your operation.