Watt's Happening

What is energy demand?

One of the most common questions we get from business customers is, “What is this demand charge on my bill, and how do I lower it?”

While the concept of energy demand can be a little confusing, business owners need to understand how it works so they can consider operational changes that may turn into major savings.

So, let’s jump into what energy demand is and how you can manage yours to help cut down on your business’s energy costs.

Understanding demand

Essentially, energy demand describes how much electricity is used at any given moment. A lot of energy usage is high demand, while little usage would be low demand.

Think about this example of low versus high demand even though both use the same amount of energy in one day. If a laundromat with 30 machines runs one at a time all day, at any given moment they are still only running one machine and have low demand. However, if that same laundromat ran all 30 machines at the same time, they would use significantly more energy at any given time and would have a higher energy demand.

For FPL to reliably supply energy even when in high demand, we must establish additional plants and add equipment to our distribution and transformer networks. The demand charge you may see on your energy bill partially offsets the cost of installing this new equipment.

For this reason, businesses with a higher energy demand will see a higher charge than businesses with lower energy demand that does not contribute as heavily to the need for additional infrastructure.  

Ways to save

When it comes to energy demand costs, you can save several ways.

First, consider joining FPL’s Commercial Demand Reduction (CDR) program. The CDR helps reduce power usage during peak demand periods, or times when the most energy is being used and supplied at once.

If FPL needs to reduce usage at a certain time, enrollees in this program are notified in advance and have their power switched to their generator, in what is called a load control event, rather than using energy supplied by the grid. In return, participants earn monthly credits — even in months with no load control event.

Also, take a look at the rate your business is charged. For example, a time-of-use (TOU) rate allows a business to use the same amount of energy but get charged less used during non-peak times. If you run a business and can shift energy usage to overnight or early morning, this may work for you.

If you haven’t already, check out the free Business Energy Evaluation (BEE). Schedule a BEE so FPL’s experts can provide customized tips about how your specific business can lower your demand charges. Another free tool is the Business Energy Manager, which you can use to better track, learn and control your business’s energy usage to save on your bill.

Energy demand sounds more complicated than it is, and we want you to know we’re always here for you to discuss your business’s energy usage and all the ways you can cut down your bill — including through managing energy demand properly.

For more ways to save, check out our other stories on the Watt’s Happening blog.