Mitigate Summer Demand Charges

Posted by Mark Gilbreth on July 31, 2019 8:07:00 AM PDT

As electricity users enter the summer months, they should be aware of the Summer On-Peak Demand Charge which is added to their electric utility bill. This demand charge is evaluated weekdays between the hours 1PM to 5PM, 12PM to 6PM, or 4PM to 9PM depending on your electric utility company and rate tariff. It is important because it is an additional charge assessed between $11 and $23/kW depending on your rate tariff. This is commonly a 25 to 30% cost added to your bill, which is significant.


The Good News is, with an understanding of your utility rate tariff, visibility into your 15-minute interval data, and awareness of your plant operations, there may be actions you can take to mitigate this cost increase. Often times, we find that the monthly demand peak is a one-time event, and by implementing a minor process change, you are able to mitigate this impact and reduce energy costs. With the Agave® application, you have the data and analytics tools to empower you to manage your electric costs.


Utility Rate Tariff information is available through the client portal. Here you will have full insight to both Winter and Summer rate tariff information, including Energy Rates and the all-important Demand Rates discussed above, as well as the specific time of use schedule that applies to your facility. Demand charges are typically higher in the Summer (June – September), making it even more important to track these peak times to curb energy consumption costs. It is important to note the differences between utility rate tariffs and electric rates. Utility rate tariffs encompass service charges, holidays, time of use periods (like demand charges), and consumption tiers, while electric rates are just the amount you will be charged per unit of electricity used. Electric rates are unavoidable but utility rate tariffs are where users can take control of their utility bills and cut back on waste to reduce energy consumption.


Up-to-date monthly Energy Cost information is also available through the portal, allowing you to quickly see what your electricity spend is for the month, while there is still something that can be done about it. Furthermore, you can click on the peak demand cost for the month and drill down to the specific day and time the peak occurred. This knowledge helps you pinpoint what equipment in your operations is driving your demand costs. No more waiting 30 to 45 days for the bill to arrive after the fact, leaving you no chance to manage your energy costs.


Our Agave® team is excited to help empower you to manage your energy costs. If you have any questions, please do not hesitate to contact us for further assistance.

Topics: energy, energymanagement, sustainability, energyimprovement, energy savings

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