1. What is Business Electricity Bill Calculation?

Business electricity bills typically consist of two main components: demand charges (based on peak kW usage) and energy charges (based on total kWh consumption). This calculator helps estimate your total bill based on these two components.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( Demand \) — Peak power demand in kilowatts (kW)
• \( Demand\ Charge \) — Cost per kW of peak demand
• \( Energy \) — Total energy consumption in kilowatt-hours (kWh)
• \( Energy\ Charge \) — Cost per kWh of energy consumed

Explanation: The demand charge covers the utility's costs to maintain capacity for your peak usage, while the energy charge covers the actual electricity consumed.

3. Understanding Demand vs. Energy Charges

Details: For many businesses, demand charges can account for 30-70% of the total electricity bill. Managing peak demand can lead to significant cost savings.

4. Using the Calculator

Tips: Enter your peak demand (from your utility bill or meter), demand charge rate, total energy consumption, and energy charge rate. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find my demand and energy charges?
A: These rates are listed on your utility's commercial rate schedule or your electricity bill.

Q2: Why do businesses pay demand charges?
A: Demand charges help utilities recover costs for maintaining enough generation and distribution capacity to meet customers' peak needs.

Q3: How can I reduce my demand charges?
A: Strategies include load shifting, peak shaving with batteries or generators, and improving power factor.

Q4: Are demand charges the same as capacity charges?
A: Similar concept, but capacity charges are typically seen in wholesale markets while demand charges are retail.

Q5: Do all businesses pay demand charges?
A: Most commercial and industrial customers do, while residential customers typically don't (though this is changing in some areas).