Demand Rate Addresses How Members Use the System in Different Ways

It has been nearly four years since United Power adopted its current rate structure that includes an energy and demand charge. Separating demand from energy charges was implemented as a way to more fairly charge members for their electric usage and impact on the cooperative’s system. While more electric utilities are making the transition to a demand rate, United Power was among the first to introduce a demand charge across its membership. To help our members learn more about demand, we have produced numerous resources dedicated to educating members so they may make the most of the rate. 

What is Demand?

Demand refers simply to the maximum electricity needed at a given time and its impact on the system.  The demand charge is the total wattage of all the power being used at that highest interval and is billed as kilowatts (kW). As the cooperative gained new insights about how each meter impacts the system differently, the decision was made to utilize demand as a measurement that helps the cooperative more fairly bill members for their usage. Since some members use electricity in ways that make them more expensive to serve, demand helps to make sure everyone is paying their fair share. When the demand charge was first introduced, the majority of our members saw very little change. Most members saw only a $1–2 increase or decrease in their bill monthly. 

Is Demand an Added Charge?

No. The demand charge on your monthly bill was separated from the energy charge, essentially “unbundling” the details of your energy use. A traditional “blended” energy rate combines energy usage and demand into a single charge for all members. The blended rate placed an equal burden on all members for system maintenance costs despite differences in how they use energy. Under the old, blended rate some members were paying more than they should while others were not paying enough. United Power’s current rates separate demand — billed as the highest 15-minute interval of energy usage during each billing cycle — from the energy charge so members are now more fairly billed for both their usage and impact on the system. 

How To Reduce My Demand

Now that you can see the impact of both the total energy you use and your highest usage intervals, you have more control over your total bill. By reducing overall energy use with simple tips like turning off devices that aren’t in use and using a programmable thermostat, you can affect your energy charge. To lower your demand charge, avoid using multiple appliances at once. Set the delay feature on your dishwasher so it runs after all the lights are off and avoid doing laundry while the air conditioner is running. 

What is the Fixed Charge?

The “fixed charge” is a line item on your monthly billing statement that all members pay regardless of how much energy they use. The fixed charge is a standard amount and covers a portion of the costs for billing, collections, member services, and metering. These services are required whether you use a lot of energy, or none at all, and all residential members pay the same amount.

You can learn more about the fixed charge and other elements of your billing statement on our Understanding Your Bill page. 

Member Rate Options

United Power introduced demand with a corresponding reduction in its energy charge and most members did not experience significant changes to their monthly bills. However, you may still benefit by switching to a different rate. 

The cooperative offers a variety of rate options for residential members to fit the many ways members use electricity. To ask our trusted advisors if a new rate plan is right for you, schedule a phone assessment here. 

Members can find more information about United Power’s demand charge — including steps you can take to control your demand and a calculator to help understand how appliances may contribute to demand — on our Understanding Demand page.

Rebates for the purchase of new refrigerators, freezers, and clothes washers will be discontinued in 2023. Members who plan to apply for any of these appliance rebates must purchase before Dec. 31, 2022. Rebate applications must be received within 90 days or no later than Dec. 31, 2022, whichever comes first. Rebates will not be issued for refrigerators, freezers, or clothes washers purchased in 2023. 

Appliance rebates for electric clothes dryers, induction cooktops, and refrigerator/freezer recycling will continue to be offered in 2023. In addition, United Power members also qualify for water heater, whole house fan, heat pump, smart thermostat, and electric outdoor power equipment rebates. The application deadline for all rebates is 90 days from the date of purchase. 

United Power evaluates its menu of rebates and energy efficiency programs annually. Rebates are offered to help improve the overall load factor of the cooperative, to help members adopt new energy efficient technologies, or to lower the upfront costs of emerging technology. Rebates may end due to improvements in appliance efficiencies or when market prices come down. New rebates and programs are added for members as emerging technologies are developed. 

Find United Power’s current rebates and programs menu at www.unitedpower.com/rebates.  
 

When Compared to Other Expenses, Electricity has a Surprisingly High Value

Electricity is a commodity we always expect to be available when we need it. We use it to power almost everything in our lives to some extent – from the alarm clock that wakes us up for work or school, to the television that helps us wind down at night, or the cell phone that keeps us connected with our loved ones. It is so readily available and easy to access we do not often realize it has a surprisingly high value when compared to many of our other daily or monthly expenses. 

As a commodity people use frequently and pay for monthly, we are acutely aware of differences in our monthly billing statements. We may be even more mindful of our electric cost when rate increases make headlines. Given the regular information you receive about utility rates, you might be surprised to learn that electricity rates have one of the lowest cost increases over time when compared to other budget items like rent and education. In fact, when adjusted for inflation, electricity rates have been steadily decreasing since 1980 despite how increasingly reliant we are on the resource in our daily lives (source: U.S. Bureau of Statistics).

The average United Power family uses approximately 22-32 kWh per day, which is roughly equivalent to $3. Now think about your daily routine. Do you grab a coffee on your way to work or order food at a local restaurant during lunch? The average cup of coffee now costs just under $5, and for special blends or add-ons it could cost more. Fast casual meals at restaurants like Chipotle or Panera can cost more than $10. That means for the cost of a single cup of coffee, you could leave an LED TV on for more than 35 days or charge your phone more than 300 times on our standard residential rate. For just $5, you can do about 20 loads of laundry. If you were to shift your usage off-peak on our time-of-use rate, you could save even more.

To put it another way, most United Power members spend more on their cell phone plan ($4-5/day) than they do on electricity (as little at $2/day). The time you spend on your mobile device, which is probably a lot, is incomparable to how frequently you require reliable electric service. Many routines and daily tasks are becoming electrified with the introduction of new electronic devices, which means we are also using far more energy now than ever before.

The best way to capture the value of electricity is to make your home more energy efficient. You could make the transition to ENERGY STAR® appliances that require less energy, install a smart thermostat to monitor and adjust heating/cooling when you are away from home, or look into our rates that reward you for switching use to off-peak hours.