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Your TDSP may still apply demand charges until your electric meter is fully de-energized. Even if your business is mostly shut down, using electricity for just 15 minutes can set a new peak demand for the month.
What you need to know about electricity demand charges for your business.
What you need to know about electricity demand charges for your business.
What is an electricity demand charge?
A demand charge is a fee based on the highest level of electricity your business uses at a single point in time. It’s determined by your local Transmission and Distribution Service Provider (TDSP) and regulated by the Public Utility Commission of Texas (PUCT). Green Mountain Energy includes this charge on your bill.
Why do demand charges matter for your business?
Business electricity bills work a little differently from residential ones. They are based on 2 main factors:
- Electricity consumption over time.
- The most electricity you use at one time, which is your demand charge.
The demand is based on the highest amount of electricity used during any 15-minute period in the month. It may be shown in kilowatts (kW) or kilovolt-amperes (kVA), depending on how your TDSP measures usage.
If your business turns on several systems at once, such as HVAC units or heavy machinery, it can cause a short spike in energy use. This peak becomes your demand, and your charge is based on that amount.
Explore 3 practical ways to help manage the demand:
Where is the demand charge on your bill?
Your demand charge appears on your bill along with other TDSP delivery fees. It’s listed as a single line item, and you’ll also see your peak demand for the billing cycle.
For more details, you can visit the Rates and Tariffs section of the PUCT website to see exactly how your TDSP calculates your demand charge.
Demand charge FAQs
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Energy charges reflect the total amount of electricity your business uses over time, measured in kilowatt-hours (kWh). Demand charges are based on your highest rate of usage during any 15-minute window, measured in kilowatts (kW) or kilovolt-amperes (kVA). Think of it like driving: Energy is the total distance, and demand is your top speed.
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The demand charge is based on your business's highest 15-minute interval of energy use during the billing cycle. This number is then multiplied by the rate in your TDSP’s tariff.
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