Reduce Electrical Consumption and Cost by Controlling Your Home’s Peak Demand

In the state in which I live electric utility companies structure rate fees based on an individual customer’s “peak demand” power usage. The concept here is to encourage customers to reduce their peak power usage and in turn reduce the need for the utility companies to add power generation equipment that is needed only to meet peak requirements.

If customers respond, this is a win-win situation for both customers and the utility companies.

Until I learned of the peak demand rate structure I had assumed that regardless of the power (electricity) I consumed I would be charged one flat rate per kilowatt. Investigating the true rate structure I learned this was not the case, but that the rate per kilowatt I was charged for electrical service was based on the highest level of kilowatts I consumed in any thirty-minute period of the billing cycle. The rate structure would then be based on this demand level. For example:

Customers using 500 kwh or less of peak demand pay a rate of $0.12 per kwh (not real data)

Customers using 501-750 kwh during peak demand are charged $0.13 per kwh.

Customers using 751- 1000 kwh during peak demand are charged $0.145 per kwh.

It is important to note that while the rate per kwh is determined based on the peak demand during any 30-minute demand period, the rate, which results from this demand, is charged for all electrical consumption peak and non-peak.

As a result controlling peak consumption of electricity can have a significant effect in lowering a customer’s annual power usage bill.

While the above is the pay structure used by the utility company in my area there are many variations of billing systems employed by utility companies across the nation. Most, if not all, electrical utility providers have some degree of peak demand management programs that provide cost incentives for customers to control/reduce personal peak power demand.

Once I understood the peak demand rate structure and the effect it could have on my annual power costs I began to seriously look for opportunities to reduce my family’s peak demand.

The first step in getting some insight into our power usage was to measure how much electrical power we used per day, and significantly, how much this usage varied from day to day as this would affect the demand peak.

We began our measurement by first learning how to read the electric meter. This is relatively simple, but does require some basic knowledge of how the electric meter measures consumption. A simple explanation as to how to read the meter can be found at:

To gain knowledge of our power consumption and importantly, wide swings in daily consumption we began reading the meter and recording daily kilowatt consumption. With this data we soon determined what our normal consumption level was as our family used electricity to power lights, TV’s, run computers, provide hot water, etc.

Opportunities for reducing our peak consumption came as we zeroed in on days when our normal kilowatt consumption noticeably jumped.

Daily readings of the meter revealed our average daily kwh usage was 33 kwh +- 3kwh.

As our heating and cooling systems are both electricity powered our peak demand requirements always are set during the heavy heating and cooling seasons. At these times our kwh usage averages 38-39 kwh during the most severe summer or winter day.

Using these average consumption levels as a base our family worked to identify the causes when daily meter readings exceeded these average levels and as we identified contributors to higher than average consumption levels we developed plans to reduce the impact of these towards establishing a higher peak demand for electricity in our home.

Some of our findings (and savings) included the following:

Running the clothes washer and dryer during the summer cooling season added up to 4 kwh per day to our electrical peak demand. To address this we began scheduling our washing and drying after 9:00 PM when the air conditioning unit did not run constantly.

The change in our clothes-washing schedule also reduced the requirement heat water with our electric water heater proving an additional reduction in electrical demand and peak electrical usage.

Learning that our electric water heater alone consumed an average of 11.5 kwh per day led us to schedule as much hot water usage as possible to hours when our air conditioning unit was not running. In addition to clothes washing we scheduled dish washing, showers and baths to be done during late night or early morning hours. This reduced our kwh usage during peak demand by 6 kwh,

Another appliance that was found to add to our peak consumption was the dehumidifier that we run in our basement. Previously unaware of the current drawn by the humidifier we let it run 24 hours a day. Once we learned that operating at this level required 7.5 kwh per day (all of which was added to our peak demand) we set the humidifier up to be controlled by an electric timer that turns the humidifier on at 10;00PM and off at 7:00 AM. We found this reduced schedule provided results similar to the 24 hour per day operation.

Once we became aware of the effects of power usage on our peak demand we began concentrating on even the small appliances. For example we have two computers that previously were turned on at 8:00 Am and left on all day, being turned off at 10:00 PM. Now we routinely shut the computers, monitors and printers down when not in uses and have saved 2 kwh per day.

The significant thing to realize when considering activities to reduce power consumption during peak demand hours is that the objective is not simply to save electricity (which certainly it does), but more importantly to reduce peak demand requirements from your home as once a peak demand is established it affects the electrical power rate you are charged on all power used in your home! By taking pro-active steps to control and reduce you home’s peak electrical requirement (demand) you are reducing the rate per kwh for all power used in your home. That is far more significant than the power savings realized in reducing or rescheduling electrical power usage.

Try it! I think you’ll like it!

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