Demand charges are typically based upon a cost per unit of peak demand. Demand is recorded as a series of peaks, usually taken every 15 minutes.

Demand readings are like a speedometer that moves up as you increase speed and stays at its highest point. Every 15 minutes this highest point is recorded then the speedometer is reset. The highest recorded peak every month is known as the peak demand.

  1. In the Rate Wizard - Feature Selection page, select the Demand charge option. This allows you to enter a cost per unit for demand.

  1. In the Rate Wizard - Demand Charges page, select the appropriate demand unit from the drop-down list (only existing unit types appear).

  1. If the demand charges are not in blocks, use step 6 (step 7 is unavailable).

  2. If the demand charges are in blocks, select the Block charges option. Use step 7 (step 6 is unavailable).

  3. If reactive demand is part of the rate you are creating, select the Reactive demand option.

  4. In the Rate Wizard - Demand Entry page, enter the cost per unit of demand (non-block charges). All kW of usage will be charged this amount.

  1. In the Rate Wizard - Demand Block Charges page, enter the cost per unit of energy (block charges) and define the block size and cost per unit per block.

 

  1. In the Rate Wizard - Reactive Demand page, enter the reactive demand charge.

  1. In the Rate Wizard - Billed Demand page, you can enter rate minimums, monthly ratchets, and seasonal ratchets.

  1. Select the Rate minimum option (if applicable) to enter rate based (not contractual) demand minimums.

  2. Select any applicable ratchets.

Ratcheting is the term applied to the utility company practice of using a historical (from previous months or years) peak demand when creating an account's bill. Often, only a percentage of a ratcheted demand applies. Comparisons are made to the current month's peak demand and, for example, 80% of the historical peak demand over the past year.

Example: A one year 80% ratchet will look for the highest demand reading for the current month and 80% of the 11 previous months. If this month's, the month of May, peak demand is 120 kW but a demand of 200 kW was recorded last December, this month's billing demand should be 160 kW, 80% of December’s peak demand.