We are all feeling the rise in electricity costs, some more than others. Recently, Duke Energy customers on rate codes DP and DS, which include schools and many other facilities that have a minimum demand over 15 kW, have probably noticed a substantial increase. This is the result of a new rider that went into effect on January 1st of this year: the Load Factor Adjustment Rider.
The bulk of your electricity bill is based on two factors: total energy used (kilowatt hours) and peak power demand (kilowatts). These two numbers, which can be found on your monthly bill, are used to calculate your load factor. Load factor is the total amount of energy you used (kWh) divided by the total amount of energy you potentially could have used.
The new rider is assessed as follows:
Facilities with low load factors are getting hit hard by this rider. Schools have especially low load factors due to their operating schedules. For a majority of the time, these buildings are unoccupied and most major equipment is turned off. Plug Smart engineer, Kevin Fisher, first realized this while analyzing the electric bills for a high school in Duke territory. Kevin put together the following graph to demonstrate how drastically their bill had increased as a result of the load factor adjustment rider.
In the case of this customer, their overall energy spend increased by more than 35%
Further compounding this problem is Duke’s harsh demand charge structure. Duke charges for demand based on the higher of the following two numbers:
1) The peak demand for that billing period
2) 85% of the highest monthly kilowatt demand as established in the summer period and effective for the next succeeding eleven months
Furthermore, Duke determines peak demand based on the highest 15 minute average during the billing period. Many other utilities have much more forgiving demand charge structures, charging based on a 30 minute average peak or 75% of the previous high (as opposed to 85%).
The logical response to this problem is to limit kilowatt demand, especially during the summer months. Plug Smart’s team of energy engineers can help you by implementing demand limiting strategies and other energy efficiency measures to help lower your electric bill. Don’t get sticker shock from Duke, let Plug Smart help.