Understanding energy demand

Posted on Jul 11 2021 in Southeastern Indiana REMC

Do you ever look at your energy bill and wonder what it all means? If your answer to that question is “yes,” then you might be interested to learn how demand impacts your utility bill.

How electricity is made and delivered

Before Southeastern Indiana REMC can send electricity to your home, that electricity needs to be generated by a generation and transmission cooperative (G&T). Once the electricity has been generated, it travels over high-voltage transmission lines to substations, where the voltage is reduced to a safer level. The electricity then travels over distribution power lines and finds its way into your home. So, while you pay your bill to us — your electric distribution cooperative — we don’t actually generate the electricity you use. That is the job of the G&T.

We do help to determine how much electricity our members need to power their homes and businesses, and you play a big part in determining how much electricity the G&T needs to create in order to keep the lights on in our community. That is where these terms “consumption” and “demand” come in.

Consumption is measured in kilowatt-hours (kWh). Demand is measured in kilowatts (kW). A lightbulb “consumes” a certain number of watts, let’s say 100 watts per hour. If that lightbulb stays on for 10 hours, it “demands” a certain number of kilowatts (in this case, 1 kW) from the generation station producing electricity. Now, if you turn on 10 100-watt lightbulbs in your home for one hour, you are still consuming the same number of kW. However, you are placing a demand on the utility to have those kW available to you over the course of one hour, instead of 10. This requires the generation and transmission plant to produce more power in less time in order to meet your demand.

SEIREMC purchases kilowatt-hours from the G&T based on the average demand of our members. Peak demand refers to the time of day when the demand for electricity is highest. This is typically during the evening when families return home from work or school, cook dinner and use appliances the most. Using electricity during this peak demand period often costs SEIREMC more. You may not see these price differences on your home’s energy bill because we average these costs into one amount per kilowatt-hour (kWh). However, high demand days can eventually lead to higher average costs for everyone.

Demand is the reason your electricity bill fluctuates season to season and even year to year. SEIREMC’s energy costs are the most expensive in the summer months (June, July and August) from 5-8 p.m., and during the winter months (December, January and February) from 7-10 a.m. and from 5-8 p.m.

Load management programs

SEIREMC offers advice, special rates and programs that help limit the peak demand or shift energy use to off-peak periods. By doing this, we can avoid the need to build new power plants or purchase energy on the market to meet increasing demand. 

Generating and distributing power can be a tricky and complicated business but rest assured Southeastern Indiana REMC will always meet the necessary demand to provide safe, reliable and affordable electricity to your family. 

Generac Generator Program

Southeastern Indiana REMC offers huge member discounts on the total home backup generator and portable generators. SEIREMC is able to install total home backup generators and transfer switch at any member’s residential premises. seiremc.com/content/generator-0

Time-of-Use Rate

Residential consumers receive service under the TOU rate for a minimum of 12 consecutive months. Energy charges vary between off-peak, on-peak and critical-peak times. The rate incentivizes members to adjust routines and shift energy use to off-peak periods. seiremc.com/content/

Beat the Peak

Beat the Peak is a voluntary program of Southeastern Indiana REMC designed to encourage members to reduce their energy use during peak demand periods. You will not see a credit on your bill for conserving energy nor will you be charged more for power if you do not conserve. seiremc.com/content/beat-peak-program