What is Residential Demand?
When we talk about demand for electricity, we mean how much power is being used from the grid at the same time. For billing, residential demand looks at each customer’s highest “at one time” usage and applies a monthly demand charge to that.
Why is there a demand charge?
The demand charge helps fairly share the cost of building and maintaining the electric system.
Higher demand means higher costs for grid capacity and power purchases, so the demand charge helps reflect those costs.
How is my demand measured?
The demand rate is based on the single highest amount of electricity you use during any one hour in your billing period. This is your “peak demand” for that month.
You can lower your demand charge by avoiding running many large appliances at the same time. For example, if you run your air conditioner, charge your electric vehicle, do laundry, and run the dishwasher all at once, your demand will be much higher than if you stagger those tasks throughout the day.
Note: Demand is measured independently of Time-of-Use (TOU) peak and off-peak hours.
What will the demand charge be?
Once the Time-of-Use and Residential Demand structure begins (no sooner than July 2026), demand will be charged at $1.00 per kilowatt (kW) of your highest one-hour demand in the billing period.
For example, in the electric study conducted for the DPU in 2025, the average residential peak demand was estimated at about 7 kW, which would result in a $7.00 demand charge for that month.
Still confused?
If it's still not quite clear, think about the electric system like a road going to your house. If you only ever need a little electricity at one time, it’s like you only need a small, one‑lane road. If you turn on lots of big things at the same time—AC, oven, dryer, EV charger—it’s like needing a four‑lane highway for that moment. Building and maintaining a four‑lane highway costs the County more than a small road, even if the total number of cars driving on it throughout the month is the same. Your peak demand is like the widest road we have to build for you, and the demand charge is how we share the cost of building and maintaining that bigger road fairly among customers. Residential Demand will be billed at $1 per KW at that single hour when you demanded the most at once.
|
Demand examples
The charts above and below represent two households, both using 60 kWh in a 24-hour period. Household One's demand is 6 KW and Household Two's demand is 3 KW, even though both households use the same total kWh. Household One will have a higher financial impact on the distribution system and infrastructure because they are requiring more from the grid by drawing 6 KW of electricity at once, while Household Two is requiring no more than 3 KW of electricity at once. Assume this 24-hour period represents each customer's highest demand day of the billing period. Household One will see a higher demand charge for the billing period as it will be based on 6 KW while Household Two's demand charge will be based on only 3 KW.
