How Do Peak Electricity Loads Affect My Bill?

You probably don’t think very much about the electrical needs of your home or office but understanding just how each uses power is an important part of managing your electric bills.

Let’s take a look at some basic concepts when it comes to evaluating the use of electricity in your home or office, and how you can use them to save money on your electric bill.

Electricity Usage: Base vs. Peak Load

When it comes to electric use, two important concepts come into play: base load and peak load. To understand each, we first have to understand what we mean by load.

In electrical terms, load is the amount of current being drawn by all the components using electricity in your home, including your appliances, electronic devices, home comfort equipment, etc.

In terms of power use, load can fall into two categories:

• Base load (also called continuous load) is the minimum amount of electricity always needed to power your home or office (the electricity supplied to your outlets, refrigerator, and HVAC equipment, for example). Base load requirements are relatively consistent from day to day.
• Peak load, on the other hand, represents the variable portion of your power use—the daily fluctuation of electricity you need based on your actual usage. (When you turn on your TV and lights, you use more electricity; this all contributes to your peak load.)

Why Does Electricity Load Size Matter?

Why do the concepts of base load and peak load matter? It’s simple, really. It’s because electricity costs more during periods of peak loading.

Peak load days or peak load hours are times of maximum energy consumption on the grid. (Peak load days usually occur in summer, when A/C use is highest; peak load hours vary, but generally occur between 8 a.m. and 8 p.m.)

At the end of the summer, your local distribution company identifies the highest peak times, and then reviews how much power you consumed during that time. This value is called your peak load contribution (PLC). Your PLC is used to calculate the portion of your mandatory fees, called capacity. Essentially, your capacity charge represents the cost of reserving enough energy on the grid to meet your maximum energy needs. It’s how the distribution company ensures that there will be adequate power supply to meet demand. 

The bottom line: By reducing your PLC (and therefore your capacity numbers), you can reduce your bills!

Tips for Reducing Your PLC

So how do you reduce your electric usage during peak hours and days? Here are six tips:

1. Shift the use of appliances away from higher-cost, on-peak demand hours to lower-cost, off-peak hours. This is more important for saving than reducing the total amount of electricity used during on-peak hours.
2. If you must use major appliances during peak hours, spread out their use during the day so you are not using several at once. Major electrical appliances that may contribute to high-demand costs include your air conditioner, clothes dryer, water heater, electric range and oven, to name a few.
3. Use a programmable or smart thermostat to reduce heating or air-conditioning usage during on-peak hours—especially when no one is home.
4. Use a smart timer on your water heater, dishwasher and pool pump; this will tell you when it is best to use your appliances.
5. Monitor your energy use, peak demand and estimated cost per day using an aftermarket tool such as the Sense Energy Monitor.
6. If you’re a commercial energy user, consider starting your building earlier and staggering equipment start times; it can be less expensive to use the same amount of energy over a longer period of time.

Knowing about the difference between peak and base load demand is vital in saving money, so dig a little deeper with your bills to understand how they work! Want another way to save money? Make Discount Power your electricity provider! Enroll online today, or contact us to learn more!