JanuaryTip2001 Energybuyer.org Tip of the month for Making the Most of Flat Rate Electricity Pricing Most deregulated electric bills do not charge separately for peak demand and consumption. Sorting Out The Charges Regulated electric rates for commercial and industrial customers usually charge separately for energy and peak demand, each of which is shown as a different line item on monthly bills. That bill may still show separate consumption and demand charges for those delivery services. Let's look at a daily load shape.
Peak demand is unaffected, so the demand charges for delivery are unaffected.
This has both positive and negative impacts. On the plus side, each kWh of marketer power is now saved at a rate that has the peak demand charge mixed into it, even though the savings are occurring off-peak. If your power contract limits how much variation can occur in your kWh usage, the marketer may try to charge you a penalty for insufficient usage, depending on your power contract terms. If you find that tighter controls could cut your off-peak energy use, be sure that you include in your power contract a wider margin of usage variation than will result from a planned upgrade. If the original payback was 4 years, that period now dropped to 2 years, which was the same as the length of the power contract.