Many companies are noticing that demand costs are rising due to utilities having to pay higher distribution charges by the electricity suppliers. Many companies are doing load shedding to reduce demand usage by installing demand controllers by EG Energy Controls. These demand controllers will do load shedding when it notices that a demand peak is coming. These smart systems will interface with the utilities meter and will turn on/off non-essential loads during that period. For example, it may stagger air conditioners, heaters and machines during the peak demand periods. This usually occurs in hot summer days and cold winter days. By doing load shedding even once a month, a company can save thousands of dollars.
Shown below is one example from Tennessee showing that the utility wants to add new demand charges to their customers. Please check with your local utility to see if “demand charges” are being added to your future power bill so you will be prepared to install a demand controller beforehand.
Changes to Tennessee Valley Authority’s rate structure that went into effect this month could translate into larger bills for Tullahoma Utilities Board.
The pricing changes, for now, will affect only distributors of TVA power, such as TUB and Duck River EMC, and not homeowners or businesses who ultimately use TVA-generated power.
However, TVA is moving in October 2012 toward a major change in pricing structure that would price electric power differently at different season of the year or times of the day.
By adding a demand charge or time-of-day method of pricing, power utilities in other states have encouraged consumers to limit consumption during high-demand periods and shift their energy consumption to low-demand periods, such as the middle of the night.
Brian Skelton, TUB general manager, said Thursday that TVA is giving utilities a rate break between high electricity demand seasons and is charging higher rates during summer months when air conditioners are commonly running and in the winter months when home heating increases electricity demand.
Skelton said the process can encourage electricity users to conserve power.
“We couldn’t afford anything like that,” he said, adding that TUB will strive to inform customers about the situation so that they can conserve in their electric usage to lower the peak demand.
The billing process is moving toward “time of use pricing” in October 2012 where TUB and other distributors will be installing “smart meters” that electronically send readings to the TUB office. Consumers will be charged different rates for electricity during different seasons and times of day to reflect the differing costs of generating more power, based upon overall demand.
Skelton said the process is geared toward encouraging consumers to change their usage habits, waiting until the lower demand time frame to do laundry or turn up their air conditioners or heating units.
He said TVA is trying to reduce power demand, particularly the amount of electricity used all at once, including during hot and cold periods. Switching to the demand and energy contract is one step in that direction, and changing to time-of-use rates is another, he added.