Demand Charges


If you take a close look at many commercial electrical bills, you’ll note something called a “demand charge”. This is a fee the utility charges you based on the maximum amount of power your facility required during any 15-30-minute interval over the last billing period. Essentially, this is a fee the utility imposes on its commercial customers to recoup some of the investment in infrastructure they need to build to support large surges in demand for power.

There are many variations in how demand charges are calculated, but they may account for 20% to 50% of a bill. In addition, demand charges have been rising and will continue to rise.

So, what measures can you take to reduce the impact of demand charges for your facilities?

For retailers and restaurateurs, you should determine which of your equipment draws the most amount of power and investigate how to reduce its peak power demand in addition to preventing power-hungry equipment from operating at the same time, increasing the total power required from the utility.

In many cases, reducing the power demand for a key piece of energy-hungry equipment may be accomplished through a retrofit. One obvious example of this is changing-out your lighting from inefficient halogens or old fluorescent bulbs to highly efficient LEDs. Doing so can cut up to 70% of the power required for lighting a facility.

Preventing power-hungry equipment from operating at the same time can be a little trickier, since it is unrealistic to expect staff in any of your facilities to manually intervene on what equipment is running and when. For example, in a facility with multiple rooftop units for heating and cooling, how do you keep them from running simultaneously?

This is where advanced technology, such as SiteSage’s System Intelligence capabilities can help. Through advanced real-time algorithms, SiteSage can redistribute the timing and use of power with intelligent queueing technology, assuring that HVAC systems don’t run simultaneously, dramatically reducing peak demand charges – all while maintaining customer comfort.

Interested in learning how we can help you reduce your peak demand fees? Drop us a note!

Leave a Reply

Your email address will not be published. Required fields are marked *