Contracted demand needs change - here is a suggestion!
- May 22, 2020 11:48 pm GMT
This item is part of the Special Issue - 2020-05 - Customer Care, click here for more
Companies and institutions pay kW demand and kWh energy. They are always facing changes, on a monthly basis. The most likely ones:
1) The intensity of activities
2) Energy efficiency measures that are incorporated
3) Participation in demand response programs
4) Distributed generation
5) Changes in energy conversion processes
6) Load shifting to off-peak hours
7) Cost arbitrage with other energy sources
The kWh portion of the bill can be easily managed. Regulated contracts are "pay as you use". Deregulated ones may have a take or pay clause but even so if consumption was below that level, the difference may be sold at the spot market.
The kW portion represents 20% or 30% of the monthly power bill. And it is a very stiff contractual arrangement around the globe. It is almost a fixed cost. Actually it is a comparison between the physical registered demand and the contracted (may be a fixed value in kW or a ratchet). The local utility charges the bigger one.
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