More on Demand Metering.
Terms We Use
Following are key terms used by Niagara Mohawk that can help give you a
good understanding of electric demand:
Kilowatt (kW)—Rate of using electricity (Demand).
Example: Ten 100-watt lamps consume electricity at the rate of
1,000 watts, or 1 kilowatt (kW).
Kilowatt-Hour (kWh)—Electrical energy actually used (Energy).
Example: Ten 100-watt lamps, when on for one hour, consume
1 kilowatt-hour (kWh) (i.e., 10 lamps x 100 watts x 1 hour = 1 kWh).
Load Factor—A measure of energy use equal to the ratio of
total kilowatt-hours (kWh) used in a given time period
divided by the peak kilowatt (kW) use during that time,
multiplied by the hours in the time period.
Example: Actual kWh used
peak kW x Time
Load factor expresses how well or poorly a given electric
system is being utilized. Electricity users strive for a
better load factor, or the most efficient usage of their
installed electric equipment. The closer to 1 a given load
factor, the better the system's efficiency.
The rock crusher who has high electric demand for small
periods of time and is not a big overall electricity
user usually will have a very low, or poor, load factor.
The energy-efficient process line, which takes advantage
of electrotechnologies and state-of-the-art controls,
will likely have a much better load factor.
While often used to measure monthly billing cycles,
a load factor's time variable can be any desired length.
Return to top.
What Is Demand?
Every electricity consumer's service bill contains
both consumption and demand charges, which can be
compared to the overhead costs of doing business.
Residential customers pay one rate of charges for
electricity service, covering both consumption of
electricity and demand. This simple, combined charge
is possible because there is relatively little
variation in electricity use from home to home.
This is not the case among commercial and industrial
energy users, whose electricity use—both consumption
and demand—varies greatly. Some need large amounts
of electricity once in a while; others, almost
constantly. Complicating this is the fact that
electricity cannot be stored. It must be generated
and supplied to each customer as it is called for—
instantly, day or night, in extremely variable quantities.
Meeting these customers' needs requires keeping a
vast array of expensive equipment—transformers,
wires, substations and even generating stations—on
constant standby. The amount and size of this
equipment must be large enough to meet peak
consumption periods (i.e., when the need for
electricity is highest).
Utilities and public service commissions around
the country have determined that the most equitable
way to cover the cost of this equipment is to have
those customers who create this demand and the need
for power during these peak periods pay for its
availability. <---------------------------------------------------------
For this reason, utilities spread
the costs of this extra equipment among all
commercial and industrial customers as a separate
charge for demand.
Defining Demand Customers
Niagara Mohawk installs a demand meter whenever
a customer’s energy consumption has exceeded
2,000 kilowatt-hours (kWh) per month for four
consecutive months. Once demand billing begins,
it does not end until after the monthly energy
consumption has been less than 2,000 kWh for
12 consecutive months. This requirement may not
be avoided by temporarily terminating service.
New or existing customers whose connected load
indicates that the energy consumption will exceed
2,000 kWh per month will have a demand meter
installed. The demand charge will be the highest
average kW measured in a 15-minute interval
during the billing period, but not less than
one kW and not less than the demand contracted for.
Customers who do not create peaks but maintain
a relatively level demand are known to have a
high “load factor.” Utility pricing policies a
re designed to pass savings on to these customers.
Comparing Demand and Consumption
On every demand-billed customer’s energy service bill,
charges for consumption and demand are separate.
This exaggerated example illustrates how the two work:
Suppose you have a commercial building with lighting,
cooling, machinery, and miscellaneous electric equipment.
Its fully installed load totals 15 kW. You are not
using the building and have no employees. On the first
day of each month, you come into the building and
turn on all electrical equipment and leave it on
for 15 minutes. Then you shut everything off again
and lock up the building until the following month.
What would your electric bill look like? It would
show very little consumption; in fact, only 4 kWh,
at a cost of about 28 cents. (Added to Niagara
Mohawk's basic service charge of $47.25 per
30-day period, which includes maintenance of
electric lines, metering and other costs such
as meter reading and billing, the total is $47.53.)
But what about your demand charge? At an average cost
of $8.32 per kW and the meter reading at 15 kW
(8.32 x 15), the demand charge would be $124.80*
(for customers in Service Classification No. 2, Small General Service-Demand).
Service from March 3 to April 3
Basic service charge and electrical consumption 4 kWh $7.53
Electric Demand 15 kW $124.80
AMOUNT NOW DUE $172.33
Prices in this example exclude applicable surcharges and taxes.
Niagara Mohawk customers billed on the demand price
who provide the transformers required to take service,
as designated by Niagara Mohawk, have their charges
reduced by $ .90 per kW billed.
Understanding Demand Metering
Much like your car's odometer records accumulate mileage,
electric meters record consumption (kWh). Electric
demand meters function like your speedometer—with
an important difference.
A demand meter's needle advances as electricity
consumption increases, just as your speedometer
needle advances as your speed increases in a car.
When you stop the car, the needle moves back to zero,
regardless of the highest miles per hour reached on the trip.
Unlike a speedometer needle, demand meters record the
highest average kilowatts reached and maintained
in a 15-minute interval within the billing period.
If within one billing cycle your demand reaches 50 kW,
for example, and stays there for 15 minutes, the meter
needle remains at 50 kW unless or until your demand
exceeds that level. If your demand later reaches
55 kW and stays there for 15 minutes, the needle
will then stay at 55. The new index point is
maintained, even when you are using electricity
at below 55 kW, until the meter reader comes to
record the demand and resets the meter back to zero.
For example, suppose you have a 10 kW motor in one
part of the building and a 15 kW motor in another.
If you operate both units simultaneously,
the demand meter will record 25 kW. However,
if you can use the motors alternately, operating
the 10 kW unit only when the 15 kW unit is off,
the maximum demand reading will be only 15 kW.
The 10 kW saved would save about $83 per month, or $996 per year.
Click Here to learn how low voltage may be costing you money!. Who Killed Montana Power?
Update 08/14/03 Just 9 Seconds The man leading the investigation into the worst blackout in history says, "we will not cover up anything." Large parts of the U.S. and areas of Canada were plunged into darkness in nine seconds, and some are still without power today. Superpower With a Third World Grid Amid the blame game, former Energy Secretary Bill Richardson who described the United States as a "superpower with a Third World electricity grid" argued the problem was due to an antiquated infrastructure. "We have a huge demand for electricity with computers, technology, more people,
but we have not fulfilled the infrastructure needed to deal with that new demand,"
he told Good Morning America today. "In other words, we don't build new transmission lines. The American people in many regions don't want them in their backyard." The problem, according to Richardson, was essentially because almost the entire eastern seaboard was run by the Niagara-Mohawk grid, which, "has been overloaded for years." Power company officials and government regulators have tried to find ways to beef up the Northeast power grid for some time. Experts say the Northeast has been short of power supplies needed for hot days and short of transmission lines to move that power where it's needed. "The power outages that we're seeing would suggest that something went wrong up in New York state somewhere from Syracuse north to the Canadian border," energy writer Bill Paul told ABCNEWS. "And what happened was a bunch of safety procedures went into play and the lines, the power, started to be cut off what you would call down stage. So you had an impact all the way down into Manhattan. You had an impact all the way out west into Cleveland and Detroit."Rolling blackouts possible By Frank Bilovsky and Heather Hare Staff writer D&C (August 15, 2003) — The Rochester area experienced one blackout this morning when the New York Independent System Operator ordered Rochester Gas & Electric to cut back on a block of power, said Dick Marion, RG&E spokesman. It lasted for about half an hour and affected the northern part of Irondequoit, Webster and portions of the city. More blackouts could happen later today if the NYISO orders RG&E to once again cut back on blocks of power, Marion said. These planned outrages are called “ rolling blackouts” by experts. Customers are being asked to curtail their use of power voluntarily in order to lessen the possibility of ordered blackouts, he said. “ This is being done statewide,” Marion said. “ So to the extent that customers voluntarily cut back on their usage, they won’t be forced or involuntarily be cut off with these temporary service interruptions.” SO WHY ARE WE STILL PAYING DEMAND CHARGES ???