What is Demand (kW)?
Demand is the rate at which a member uses electric energy. A kW is 1000watts, and a kWh represents a 1kW used over 1 hour. Two members can use the same amount of energy, but one might use it slowly (for example, 1kW over the course of an hour) and the other much faster (for example, 1kW in 15 minutes). The first member put 1 kW of demand on our system; the second put 4 kW of demand, since they used the energy 4 times faster.
Here are a couple of good everyday analogies that might help in understanding electric demand vs. energy:
What is the Demand Charge?
Demand charges are set to recover the costs associated with fixed capacity-related distribution equipment and/or wholesale purchased power. These costs are not associated with the number of customers using energy over time. Rather, they are a function of sizing the equipment to meet a member's peak demand, or maximum usage at a specific point in time. Costs to build and maintain a distribution substation would be an example of capacity-related fixed costs, as well as the remaining fixed costs to purchase, operate and maintain lines and transformers not already recovered in the monthly flat Service Access Charge.*
Tip: Members with demand charges should stagger their usage. For instance, turn units on in 15 minute increments.