Scheduling

Often there are several pieces of equipment that only run a few hours each day. The demand charge can be reduced by scheduling the equipment to run at different times. Energy demand is the rate of kilowatt-hours used over a specified time period. The demand charge is based on a fifteen-minute interval. For example, twenty 50-watt light bulbs are turned on at the same time and kept on for 15 minutes. In this case, the energy use would be 0.250 kilowatt-hours and the demand is 1000 watts or one kilowatt. If the lights are left on for one hour, the energy use is one kilowatt-hour and the demand is still one kilowatt. Now, let ten of the lights on for one hour and then have the other ten lights turned on for one hour. In this example, the energy use is still one kilowatt-hour, but the demand charge is only 0.5 kilowatts. By scheduling the use of the lights, the demand charge was cut in half.
Often the demand charge can be reduced this way. The demand charge is a large portion of the electric bill and is usually the easiest to reduce. The demand charge is easiest to reduce because it generally only requires scheduling changes and no equipment costs or changes. For a quick calculation it can be assumed that one-kilowatt of demand is charged for each horsepower used.