Understanding Demand Charges in Condominium Buildings

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In summary: A higher power line would only increase the amount of power that the utility could deliver, but it would not help the system to size for the peak demand.
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waterfall
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My sister has a condo unit whose building used to have Demand Charge of only 40 Base in 2010. Then suddently the Base became 115 in 2011 up to now. Does anyone have an idea why? The building admin didn't understand why because they are not technical people. Did the power utility increase the power lines levels outside or did they adjust the load or something. What could they have possibly done to make such big Demand Changes? There is no additional load in the building. No one has a clue. Electricity has jump to twice. Why did Demand Charge jumped from 40 to 115 all of a sudden? Thanks.
 
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IN short - demand charge are what the utility bills you to be able to have the capacity to meet your highest demand. I believe many systems will monitor for the highest usage over a 15 minute period for the whole month. In a condo - if everyone turns their AC on at 5:00PM - I'll bet that is the peak they are seeing.
For example - if you added setback thermostats to all of the condo units - and programmed them the same way (5:00PM )- you will get hammered for a demand charge.
 
  • #4
Windadct said:
IN short - demand charge are what the utility bills you to be able to have the capacity to meet your highest demand. I believe many systems will monitor for the highest usage over a 15 minute period for the whole month. In a condo - if everyone turns their AC on at 5:00PM - I'll bet that is the peak they are seeing.
For example - if you added setback thermostats to all of the condo units - and programmed them the same way (5:00PM )- you will get hammered for a demand charge.

What does the utility company usually do to increase one's demand requirement.. do they put higher power lines to the building or do they just replace the meter?
 
  • #5
Hello Waterfall - Like I said, the 5:00PM surge is tough, so the whole system has to be sized to meet the peak demand. The way you phrase your question - I am not sure what you mean. The Utility does not increase the customer demand requirement, but the utility has to be able to effectively supply power for everyone - so they have to have supply ( generation) on line AND the whole system has to be able to deliver the power.
 

FAQ: Understanding Demand Charges in Condominium Buildings

1. What is demand charge?

Demand charge is a fee that is charged by utility companies to commercial and industrial customers for the peak energy demands they place on the electrical grid. It is calculated based on the highest amount of energy used during a specific time period, typically in kilowatts (kW).

2. How is demand charge calculated?

Demand charge is calculated by multiplying the peak energy demand in kW by the demand charge rate set by the utility company. For example, if a business has a peak demand of 100 kW and the demand charge rate is $10/kW, the demand charge would be $1000 for that billing period.

3. Why do utility companies charge demand charges?

Utility companies charge demand charges to cover the costs of maintaining and upgrading the electrical grid to meet the peak demands of their customers. The demand charges also encourage customers to manage their energy usage and reduce their peak demand to help lower overall electricity costs.

4. Can demand charges be avoided?

In most cases, demand charges cannot be completely avoided. However, businesses can lower their demand charges by implementing energy efficiency measures, such as using energy-saving equipment and scheduling energy-intensive processes during off-peak hours.

5. Are residential customers subject to demand charges?

No, demand charges are typically only applied to commercial and industrial customers who have a larger impact on the electrical grid. Residential customers are usually charged a flat rate for their energy usage.

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