Demand Charge Time Item

March 2024

Beginning May 1, 2024 members will see a Demand Charge added to their bills

Under our current residential rate structure, we bundle the energy and the demand into one energy rate. However, you will now see a three-part billing with a base service charge, energy usage charge (kWh's) and demand charge (measured in kW).

The demand charge collects costs more accurately and fairly from members. This adjustment reflects the cooperative's need to size our electrical system based on the individual demand requirements of each member. It also gives you more control over your electric bill because you can reduce your demand by shifting usage to off-peak hours (9 p.m. - 6 a.m.), when the demand on the system is lower, or by spreading out the use of large appliances throughout the day.

What is the demand charge?

The demand charge is a fee based on the amount of electricity a member uses at a specific point in time. It is the maximum rate at which your household consumes electricity. Unlike energy charges, which are based on the total amount of electricity consumed (measured in kilowatt-hours), demand charges are related to the highest level of power usage within a specified time frame, often measured in kilowatts (kW.)

Riverland Energy measures demand in kilowatts (kW) in 15-min intervals. This means the 15-minutes your equipment is consuming (or “demanding”) the most electricity in a given month establishes your demand reading. The monthly demand charge is $1.00 multiplied by your highest amount of usage (in kilowatts) that occurred within one
15-minute period during the peak hours of 6 a.m. to 9:00 p.m. throughout the billing period.

The demand charge aligns costs more accurately and fairly for members since the co-op pays a premium for power used during peak hours, such as when we are heating or cooling our homes. This rate structure can provide members more control over their bills since it is possible to reduce demand by shifting use to off-peak hours (9 p.m. - 6 a.m.), or
shifting the use of major appliances during peak hours (6 a.m. to 9:00 p.m.) rather than running them at the same time, as shown in the illustration:

June 2023

Members will now see a line item on their bill called “demand charge.”

Demand charge is based on each member’s maximum “demand” put on the cooperative’s distribution system. The amount of electricity you consume in a month is measured in kilowatt hours (KWH), while “demand” is measured in kilowatts (kW). The max demand is the highest energy used in a 15 minute period over a month. That means the 15 minute interval that your business or residence is consuming (or “demanding”) the most electricity, in a given month, establishes your demand for the month. The demand charge line item will have a date and time stamp of when it occurred for your service, with a zero charge.

It is important to understand that demand isn’t necessarily about how much energy you use, but how and when you use it over the course of a month. For instance, a typical residence can control demand by turning off the air conditioner while doing laundry. By not allowing the A/C to run at the same time as the electric water heater and/or electric dryer you are reducing your demand.

Example: