Here’s how energy for large commercial and industrial customers is billed:
Basic monthly charge: Covers metering and accounting expenses.
Energy charge: (kWh) Covers the cost to produce the electricity you use during a billing period. Energy charges are for the total amount of electricity used.
Demand charges: (kW) Demand is the rate at which you use electricity at a given time. It covers the cost for the equipment (transformers, generators, power lines) needed to bring you service.
The kilowatt (kW) and the kilowatt-hour (kWh) are the basic units of electricity. Your meter measures these units, and we use them to determine your monthly bill.
Columbia Water and Light determines your demand charge by measuring the energy you use over 30 minute intervals. We base the demand charge on your highest average monthly electric demand in any one 30 minute period. Demand charges tend to be 25 percent to 50 percent of your total bill.
For example, if you turn on ten 100-watt light bulbs, you have an instant demand of 1 kW (10 X 100 watts = 1,000 watts = 1 kW). If you leave these ten lights on for one hour, you have an electric use of 1 kWh (1 kW X 1 hour = 1 kWh). If you leave them on for two hours the demand is still 1 kW, but the energy charge is 2 kWh. If you had a demand of 1 kW for two hours, your bill would be less than if you had a demand of 2 kW for one hour, even though your kWh use would be the same. Since you are billed for both demand and energy, keeping both components to a minimum will help keep your electric bill low.