Since our new rate structure was implemented in January, we have received many inquiries about peak demand so I wanted to explain it in greater detail. Cloverland Electric Cooperative’s peak demand charge better aligns costs more accurately and fairly for members since the co-op pays a premium for power used during peak hours, such as when we are heating our homes. This rate structure can provide members more control over their bills since it is possible to reduce demand by shifting usage to off-peak hours.
This change in billing methodology is imperative as our state (and nation) considers expanding its renewable portfolio standard to require a dynamic shift to a carbon-free future. This shift would make us reliant on intermittent renewable energy resources as well as a desire to electrify the auto industry. Electric vehicles have the potential to significantly increase our co-op’s electric demand. This factor, coupled with generation resources that are not always available, makes demand management critical to controlling costs.
Peak Demand Explained
- Electricity delivered to your home is “on-demand” and must be generated at the same exact time you’re using it.
- Demand measures the maximum amount of power (kW) each member requires each billing period during Cloverland’s peak demand times when costs are higher.
- Generally, our Eastern Upper Peninsula members use electricity at the same time: heating homes, preparing for work, and using appliances in the evening to prepare meals or do laundry.
- Collectively, members use more electricity at certain times of day, which creates a “peak” usage for the cooperative.
- It costs Cloverland more to purchase electricity from Wisconsin Energy during “peak” times.
- The new rate structure allows the costs of using energy during peak usage to get passed back to members in the form of a “peak demand charge” on monthly bills to align usage with true costs
How to Reduce Your Demand
To reduce your demand (and peak demand charge), consider making simple adjustments.
- During peak hours, spread out the use of major appliances rather than running them at the same time.
Consider doing laundry and running appliances that require significant electricity during nonpeak hours. - Consider the “delay” function on appliances such as dishwashers, washers, and dryers so that a load starts during nonpeak hours.
- Purchase a programmable thermostat to reduce heating or cooling during peak hours.
- Charge batteries for electric vehicles, lawn care equipment, etc. during nonpeak hours
Calculating Peak Demand
Peak demand is the maximum rate at which your household consumes electricity during a billing month. Cloverland measures peak demand within a specific window of 8 a.m.-9 p.m. Each Cloverland member’s highest monthly point of usage (measured in kW) is multiplied by the peak demand rate to determine the monthly peak demand charge. The peak demand rate is set by each rate class as recommended from the co-op’s cost of service study as follows:
- $0.93 residential
- $1.67 general service 1
- $2.02 general service 2
Peak Demand Window
The graph shows the system peak for Cloverland over the past five years, which varies greatly each month. As this chart demonstrates, our peak demand varies within a broad range throughout the year. As we manage our system’s peak demand through careful planning and analysis, we hope to narrow the window of time when peak demand for members will be assessed.
As a member-owned electric cooperative, our goal is quite simple – to provide reliable and affordable service and to treat members equitably. We hope this rate structure helps our members use energy more wisely. The reality is when we all use less energy during peak hours, it costs the cooperative less money and we all save.