Demand can be likened to a speeding ticket -- if you get caught you could be billed based on how fast you can consume power.
The electrical grid is built to respond, even at peak demand (fastest speed). Just like a car it needs an engine powerful enough to drive at full speed, even if you choose to always drive slow.
Demand (kW) is the speed (how much power used now), while Consumption (kWh) is the distance (total energy used over time).
Your electric bill charges for both: the size of the engine you need (demand) and the total miles you drive (consumption).
For example:
Demand (kW): Your car's speedometer (e.g., 60 mph).
- Measures the rate of energy use at a specific moment (kilowatts).
- Determines the size of the power system needed (like engine horsepower).
- Consumption (kWh): Your car's odometer (e.g., 100 miles).
- Measures total energy used over time (kilowatt-hours).
- Calculated by multiplying demand by time (Speed x Time = Distance).
Why it Matters for Your Bill
- Peak Demand: If you use a lot of power at once (e.g., A/C, dryer, EV charger starting simultaneously), your "speedometer" spikes, creating a "peak demand" charge.
- Staggering Use: Running appliances at different times (e.g., dishwasher after dinner) lowers your peak demand and saves money, just like driving slower saves gas.
Watch this video from the Minnkota Power Cooperative about "Understanding Demand" for an explanation of electric demand: https://youtu.be/E9RIA_43ypU?si=JP9XJsb09EnzsRUY
Want to learn more, watch this animation by Touchstone Energy: Understanding Demand Charge | Educational Animation on Vimeo