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Published byJanel Mills Modified over 6 years ago
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Making Cents of Energy Understanding Utility Rates
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Disclaimers I am talking about commercial energy rates
Disclaimers I am talking about commercial energy rates. Focus is on electrical. These are just the basics.
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What’s in the Bill You pay for: - Consumption - Elec Demand
- Power Factor - Misc. Fees What’s in the Bill Rate Type Miscellaneous Fees Electric Consumption Electric Demand Gas Fees Power Factor
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Demand Demand is a rolling 15 minute window of how much electricity is being used at any given time. A peak is set when the user achieves the highest 15 minute average within a billing period. You are billed for the peak amounts per the published peak rates. It is not uncommon to see demand charges equaling close to half of a commercial building’s electric bill. A Demand Ratchet stipulates that an owner will pay no less than X% of their highest demand point in the last year.
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Why does the utility company charge for demand?
Building #1 Peaks at 1,000 KW Building #2 Building #3 Utility Provider Simplified Example: A utility provider serves three buildings. Each building peaks at 1,000 KW That’s a total of 3,000 KW that is being “demanded” of the utility provider.
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Most Common Electric Rate Types
General Service Rate – For owners with average annual loads under 50 KW. Only consumption, no demand charge. Power Service Rate – For owners with average annual loads between 50 KW and 250 KW. Time-of-Day Rate – For owners with average annual loads greater than 250 KW. Includes base, intermediate and peak times.
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Primary or Secondary Service
Primary Service The owner owns and maintains the transformer. Secondary Service The utility provider owns and maintains the transformer. You will pay higher utility rates for a secondary service because the utility provider is taking responsibility for the transformer.
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