# Understanding Your Commercial Bill

## Here's How Energy for Large Commercial and Industrial Customers Is Billed

**Basic Monthly Charge**

Covers metering and accounting expenses.

**Energy Charge**

Kilowatt-hours (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**

- Kilowatt (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 10 100-watt light bulbs, you have an instant demand of 1 kW (10 X 100 watts = 1,000 watts = 1 kW). If you leave these 10 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.