Facility Management

Save Money by Implementing Peak Demand Strategies

Is it possible to use more energy, while at the same time lowering your overall energy cost?


Colby May  ·  November 6, 2017

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Is it possible to use more energy, while at the same time lowering your overall energy cost?

While I need to flesh this out—the answer is yes.  Of course our goals should be managing our energy to the best of our ability, but there are other aspects of our energy use that we must understand.

Electric Use Breakdown:
Our electric bill is measured in a number of ways.  One is kWh or Kilowatts per hour.  The kWh you see on your electric bills are the total number of kilowatts used in a billing cycle (typically 30 days).  Rates per kWh vary, but range from $.06-$.15 per kWh.  KWh is directly tied to our energy use.  If we use more kWh and thus cost increase, if we use less our kWh and thus cost decrease.  However there is another area of utility bills we MUST understand, as many churches (not all) are being charged.  This area is called peak demand.

Understanding Peak Demand:
Peak Demand or kW is energy measured over a 15-minute period of time.  The utility company will then charge you for the HIGHEST 15-minute period for a given month.

For example if your average kW is around 150 kW, then during a very busy and very hot time of the day you decide to turn on all HVAC, Lighting, and plug load your kW spikes to 250.  You will not be charged the 150 kW in reference to peak demand.  The utility company will charge you the 250 kW x the demand rate $10 (fluctuated per region), this means you facility will pay $2,500 opposed to the $1,500. 

Not only this, but also most areas charge an annual Peak Demand (can also be called Ratchet Demand), where the utility will charge the client for the highest kW during a given year. 

For example: Church-A averages 250 kW per month, but during a hot Friday in July the church schedules an outreach event.  The kW skyrockets to 450 kW.  The church will be charged the 450 kW for the next 11- months and not the 250 kW.  This not only impacts the month, but impacts the entire year.  450 x $10 x 12 months = $54,000 compared to 250 x $10 x 12 Months = $30,000.  This one event cost the church $24,000.

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ARTICLE TOPICS

Facility Management · Blogs & Opinion · Energy Efficiency · Facilities Management · Green Building · Operations · All Topics

ABOUT THE AUTHOR

Colby May
Colby May is a Certified Energy Manager, having performed ​o​ver 1,000 energy audits at facilities across the US. ​A graduate of Gordon Conwell​, he has a specific interest in enabling the faith-based community in sustainability and stewardship in order to empower change. Colby​, the CEO of LIT www.consultlit.com​, can be contacted at colby@consultlit.com. He is also a husband of ​thirteen years and father of ​two​ adventurous sons.
Contact Colby May: colby@consultlit.com ·  View More by Colby May


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