Demand Rate Addresses How We Use it Differently

United Power switched to a demand rate in January 2019 as a way to more fairly charge its members for their electric usage and impact on the cooperative’s system. Since its roll out, some members have asked why the switch was made and requested more information about demand and how to understand it.

Electric utilities like United Power often use terms like “distribution system,” “electric infrastructure” and “grid.” These terms refer to the interconnected network of poles, wires, transformers and substations that work to deliver — or distribute — power to members. The system is carefully engineered to meet the needs of more than 100,000 meters and the homes and businesses served off those meters.

Like any other household appliance or electronic device, pieces of our system wear out over time and need to be repaired, replaced or even upgraded to improve reliability. These maintenance costs aren’t based solely on how much power you use, however, but how and when you use it.

When you use more power at once, you’re creating a higher demand on the system. These demand surges have a greater impact on the grid.

For example, a member in a small apartment with a window air conditioning unit doesn’t have the same impact on the grid as a household with two air conditioning units and a hot tub.

Some devices on the system have capacity limitations, for example, meaning they can only maintain a certain amount of power at a given time. The cooperative places these devices strategically to ensure power reliability. When one household served off that device uses a larger share of energy, it causes more wear on it. In some cases, the cooperative may need to replace existing devices with higher capacity ones to accommodate increases in energy usage.

With the traditional blended rate, which bundles demand and energy usage, each United Power member shares an equal cost in the maintenance of the system despite using it in vastly different ways. This means some members have been paying more than they should, while others aren’t paying enough. Whether you use a lot of energy or a little, or even generate your own, a reliable grid is something we all depend on and need available to us.

By separating the demand and energy components on your bill, we are more fairly distributing these costs to members based on how they use power. Each member now pays their fair share of the cooperative distribution system they rely on.

United Power offers a free online resource for members who want to know more about how they use power. Power Portal breaks down your energy usage in 15-minute intervals so you can easily tell what habits are contributing to your demand. Visit Power Portal to learn more about this member resource.

If you have additional questions about the demand rate, you can go to Understanding Demand or reach one of our dedicated energy management specialists at 303-637-1300.

Demand for Electricity is like Demand for Water

You can fill the same 5-gallon bucket with either a garden hose, or a fire hose. A garden hose will not fill as quickly – but the hose costs less to operate, and the impact on the water system is minimal. Fill that same bucket with a fire hose, and it will fill up very quickly, but the surge of water from a fire hose requires larger pipes and a more expensive hose. In the end, both buckets would be full with the same amount of water, but filling a bucket more slowly – smoothing the water use over time – creates less demand on the system and costs less to do.