October 1, 2018 | Beginning next year, United Power members will be charged differently for how they use energy. As was announced earlier this year, United Power will be implementing a new rate structure that will include a residential demand charge. We are continuing the conversation about the 2019 change to residential rates by talking about why the change to the rate structure is happening now, and by taking a look at the information you can use to learn more about your electric consumption.  

What is Demand?

Demand refers to the maximum amount of electrical power that is being consumed at a given time, as opposed to energy which is the amount of power used over a period of time. The more power used at once, the larger the infrastructure that is needed to deliver that power. United Power must build our system to accommodate the most possible power use at any given time, and this comes at a cost to the cooperative. 

Why the Switch to a Demand Rate?

Residential electric rates have traditionally been a blend of costs: the cost of fuels to generate power, the cost to deliver the energy to your home, the cost to the cooperative to maintain and operate the system and even the cost to provide billing and member services to our members. These costs have long been allocated to members based simply on service type—even though some members’ usage patterns impact our system more than others. 

We now have access to more information about how each member uses energy and the electric system. By breaking out these costs—the Fixed Charge, Energy Charge and Demand Charge –every member will be charged more fairly for how and when they use energy. The new rate structure also ensures United Power recoups the actual cost of service to each member in a fair and equitable way. 

How Do I Learn More About Demand?

United Power has been discussing this new rate structure for several months. Read past issues of the United Newsline for more examples and information to help you understand Demand. A list of frequently asked questions can be found at Understanding Demand.

Your bill is also a valuable resource to learn more. The Demand Charge line item represented by a kilowatt (kW) measurement that now appears on residential electric bills offers you a clearer picture of how you use electricity. There is no charge currently associated with this Demand line item, but by providing this information ahead of the rate change, you can more closely monitor your energy use. 

Members can also use our Power Portal to take a deeper look into their monthly consumption and pinpoint the exact moment they hit their monthly peak demand. Viewing your peak demand period in the Power Portal may help you recall that Monday afternoon when you ran the air conditioning, dishwasher and vacuum all at once. Perhaps you’ll decide that you can stagger these activities in the future to manage your energy costs.

How Much will the Demand Rate Cost?

The exact rate for the Residential Demand Charge has not been set. United Power’s Board of Directors will meet before the end of 2018 to approve the final rate. The intention is to introduce this new rate structure slowly with small incremental changes annually over a four-year period. Demand charges for residential ratepayers will be lower than those paid by commercial customers based on how they use power. Watch for announcements in the United Newsline and on our website www.unitedpower.com with more information on the approved rate. 

If you have questions about the Demand Rate, please e-mail unitednewsline@unitedpower.com. We’ll post answers on our website and in a future issue of United Newsline.