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Understanding Demand and Consumption
Main The difference between demand (KW) and consumption (KWH) is vital
to your choices in
Contact Us reducing your energy costs. A simple way to see the difference
between demand and
Clients consumption is by considering two examples.
Past LIGHTING EXAMPLE: One 100-watt light bulb burning for 10 hours
Performance consumes 1,000 watt-hours
or 1 kWh. The entire time it is on, it requires or "demands" 100 watts
Energy or 0.1 kW from the utility.
Partner That means the utility must have that 0.1 kW ready whenever the
customer turns the lamp on.
Articles,
Interviews
and Awards
Payback
Periods
Utility
Refunds
Alternate
Rates and/or
Meters
Energy Audit
Tools
Bldg. Types
Energy Similarly, ten 100-watt light bulbs burning for 1 hour consume 1,000
Conservation watt-hours or 1 kWh. Note that in both
Measures examples, the consumption is 1 kWh, however, look how differently
the second situation impacts the utility
DeReg Maps from a demand perspective. The serving utility must now be prepared
to provide ten times as much 'capacity'
DeReg Terms in response to the "demand" of the 10 light bulbs operating all at once.
Certifications If both of these customers are billed for their consumption only, both
will get the same bill for 1 kWh of energy.
Memberships And that is the way most residential customers are billed. But the
requirement for the utility to meet this energy
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Understanding Demand and Consumption Page 2 of 6
States requirement is very different. In the second case, the utility has to
Served have 10 times more generating 'capacity' to
provide the second customer's brief high demand for power compared
Electricity to the first case.
Cost/KWH
Commercial and industrial customers are often billed for their hourly
Natural Gas consumption patterns and their peak demand
Cost/MCF for energy. These customers often have special meters that measure
both, unlike residential meters that just
Energy record total consumption in a time period, usually one month.
Rebates
Energy
Glossary
Energy Units
Electricity
KW and KWH
Explaination
Energy
Engineering
So, you might ask, "why doesn't the utility bill all customers for demand
and consumption?" Seems like that is only fair.
Residential
And it would be, but the fact is that most homes have a pretty similar
Energy
demand profile and the meters capable of measuring
Management
both demand and consumption are much more expensive. Far too
expensive to justify having one on every home. So all
Renewable
most residential customers need to be concerned with now is
Energy
consumption billing. As the cost of metering drops, and as
automatic metering advances, we may see increased use of demand
Government
billing for homes.
Customers
Down Loads
WATER EXAMPLE:
Another way of understanding demand and consumption is with a
"filling the bucket" analogy.
Suppose you want to fill a 5 gallon bucket with water. You can use an
inexpensive hose connection
to your sink providing 1 gallon per minute to do it, and it will take 5
minutes.
The flow rate is the equivalent to demand, and the 5 gallons of water
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How Demand Changes Are Computed and Billed
As you have just learned, electric power use is metered in two ways:
on maximum kilowatt use during a
given time period (i.e., kW demand typically measured in 15-minute
or 30-minute intervals) and on total
cumulative consumption in kilowatt hours (kWh). A customer's
electric rate is set using a complex process
of tracking cost of services and often seeking regulatory approvals.
The general theory is that demand charges reflect the utilities' fixed
costs of providing a given level of
power availability to the customer, and energy charges reflect the
variable portion of those costs as the
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Understanding Demand and Consumption Page 5 of 6
Power companies often use a meter that records the power use during
either a 15- or 30-minute time window.
The average power used during that window is used to calculate the
kW demand. The peak demand used for
billing purposes in any month can be:
The meter recording kWh power use during either a 15- or 30-minute
time window also tallies total kWh use.
This meter is read at roughly monthly intervals and total power use is
billed according to applicable pricing schedules.
The type of energy charge pricing in common use includes:
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