What are demand charges and how do they work?

What are demand charges and how do they work?

Demand charges are fees based on the highest level of electricity demand during a billing period. They reflect the cost of maintaining the infrastructure to meet peak demand.

Why do utility companies charge demand charges?

Utility companies charge demand charges to ensure they can provide enough power during peak usage times, which helps maintain grid stability.

How can I reduce my demand charges?

You can reduce demand charges by managing your energy usage, shifting high-demand activities to off-peak times, and using energy-efficient appliances.

Are demand charges the same for all customers?

No, demand charges can vary based on the type of customer (residential, commercial, industrial) and the specific utility provider's rate structure.

Can demand charges be avoided completely?

While you can't completely avoid demand charges if your utility has them, you can minimize them through effective energy management strategies.