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Understanding Charges

For many customers on several of CVPS's general service and industrial rates - 2D, 4, 5, and 10 - the largest individual cost on their CVPS bill is the demand charge. Gaining an understanding of demand may help customers control these charges on their monthly bills.

These customers pay separate charges for energy and demand, terms that often cause confusion. To understand these charges, let's first define the terms:

Energy is the amount of electricity used over a period of time, measured in kilowatt-hours (kWh). Demand is the rate at which energy is used, measured in kilowatts (kW).

The flow of electricity is similar to the flow of water. For electricity, the total volume of electricity used is measured in kilowatt-hours - gallons are to water what kilowatt-hours are to electricity.

For water, the demand is the rate of flow measured in gallons-per-minute. Similarly, the rate at which electricity is used is the demand. For example, having electric motors or equipment all running at the same time or all the water faucets turned on at one time creates the demand for that facility.

Why CVPS charges for demand

A water company must build dams and reservoirs, and install water mains large enough to supply a maximum number of gallons per minute required by its customers. Even though the demand may be lower for the rest of the month, the system must be large enough to satisfy the water needs during peak periods.

CVPS is also required to build its electrical system to accommodate customer needs. The system must be large enough to deliver the maximum amount of electricity needed at any moment. Power lines and transformers are sized to carry customers' maximum demand, even though some customers may require less capacity during other times of the month.

All CVPS customers on these rates pay the costs associated with having the needed system available at all times.

CVPS's general service meters measure demand continually throughout the month in 15-minute intervals. The highest demand registered during the month is the kilowatt charge on the customer's bill.

For example, if your demand reaches 25 kW and stays there for 15 minutes, the meter's needle remains at 25 kW until the actual demand exceeds that level. If the demand later reaches 30 kW and stays there for 15 minutes, the needle will stay at 30 kW.

This new maximum demand remains at this level until a higher demand is set. When the meter is read, the meter reader records the month's peak demand and the demand reading is reset to zero.

Common misconception

Staggering the use of equipment over 15-minute intervals will not minimize the demand. In the case of lighting, if you turn on one bank of lights equal to 1,000 watts or 1 kilowatt (kW) and leave it on for 15 minutes, the meter registers 1 kW. If you wait 15 minutes, then turn on a second bank of lighting, also equal to 1 kW, and also left on for 15 minutes, then the meter will record 2 kW.

The only way to reduce the demand for this lighting load is to turn off the first bank of lighting before turning on the second bank of lights. For customers who use large electric motors, there is a momentary in-rush of electricity needed to start the equipment. Allowing time for each motor to level out to its lower operating electric load before starting other motors can minimize demand charges.

CVPS customers can control their electric costs by practicing energy conservation measures, purchasing energy efficient products such as, lighting, motors, and heating, air conditioning and ventilation equipment, and turning off equipment that is not being used.

Control devices are also available that establish priorities between pieces of equipment so that an item with a lower priority will not start up when equipment having a higher priority is already operating.