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Demand is recorded by the electric meter installed by the utility, typically every 15 minutes. The largest kW demand recorded during the past month – and possibly during the past year – is what is shown on the electric bill.

Mystery Events and Vague Charges – On Your Tab

Oct. 4, 2021
You can save your metalcasting operation a lot of money by identifying and addressing the mystery event causing the spike in your monthly Demand charge.

The largest part of your current electric bill resulted from a momentary event during the past month, or even during the past year. But when did it happen and what caused it? A similar charge appears every month, but nothing on your bill identifies what is triggering it.

Start by looking for a line item on the electric bill called Demand Charge (some utilities call it Capacity Charge). A dead giveaway is it’s usually around 50% (or more) of your total bill.

The utility bill is a marvel designed for a single purpose: It tells you how much to pay and when it’s due. Sure, there are lots of line items representing various charges but all these are summary totals, with little to no description and no detail to support them. Most people don’t have the time or inclination to do anything but pay the bill and get back to running the foundry.

But that Demand Charge is worthy of more scrutiny. After all, it is the costliest item.

Your Demand (also known as Peak Demand), represented in kilowatts (kW), is the largest volume of electricity that you consume at a moment in time during the month. This is recorded by the electric meter installed by the utility company, typically within each 15-minute time period during the month. The largest kW recorded during the past month is what is seen on the electric bill. So, why is this the biggest charge on the bill?

Your state public utility commission allows your electric utility to charge you for each kW of Demand you consume. That “per kW” amount is often $10.00 (or more.) Any amount of kW that you can reduce will save you money. An actual example was reported by FMT in 2008: Rochester Metal Products was able to save $60,250 per month by reducing its demand by 5,000 kW.

What is this Demand charge buying for you? A common explanation that electric utilities provide is that because electricity is delivered to you instantly, they must have enough generation available to meet your largest needs. The Demand charge pays for those “spinning reserves” required to meet your needs.

Fair enough, but utilities also charge every commercial and industrial customer for its peak demand. What are the odds that the total peak demand of all customers would need to be fulfilled at the same time? But I digress.

So, it’s basically a promise to deliver what you need when you need it. It’s not calculated according to how much you consumed, but rather the rate at which you consumed it.

Looking for ways to reduce your peak demand can save you a lot of money, but where do you start? Certainly not your electric bill, but there is something else that your utility company can provide to you. Just contact your electricity provider and request the “interval data” for each of your electric accounts. One year, or more, of this data is usually available and it summarizes your kW and kWh usage every 15 minutes.

The interval data usually can be provided as a data file you can load into Excel for analysis. This can be a great help to determining when peak usage is occurring, right down to the date and 15 minute timeframe. Armed with that insight you can investigate what might be done to reduce your peak usage. Some suggestions would be staggering the start-up of equipment that uses a lot of electricity, shifting some processes to different time periods, etc.

Some foundries have installed additional meters or sensors that provide even greater detail on power usage. Such devices record the consumption every few minutes, or even seconds. More frequent intervals of data collection allow for greater insight into what is happening in your operations. In a future article we’ll review how we partnered with a sensors company to monitor energy usage during furnace operations.

Brian Reinke, president of TDI Consulting, is an energy-cost saving consultant. Contact him at [email protected]