New to auditing Xcel Energy accounts and I'm confused about their coincident peak demand charges. I see both a regular demand charge and something called "Transmission Demand Charge" based on coincident peak. Can someone explain how this works? The bills show different kW amounts for each charge and I'm not sure which one ratchets forward.
Xcel Energy Coincident Peak Demand - Help!
Kirk, the regular demand charge is based on the customer's individual monthly peak, and that does ratchet forward for 12 months. The transmission demand charge is based on their usage during Xcel's system peak hour, which typically occurs on hot summer afternoons. That one doesn't ratchet - it's billed monthly based on actual coincident demand.
Thanks Natalie. So if a customer peaks at 500 kW in July but was only using 300 kW during the system peak hour, they'd get charged: 500 kW for regular demand (ratcheted forward) plus 300 kW for transmission demand (just that month)?
Good explanation Kevin. Kirk, one thing to watch for with Xcel is that they sometimes estimate the coincident peak demand if they don't have interval data for that specific hour. Always verify that they're using actual readings when possible, as estimates tend to run high.
Exactly Kirk. And the transmission demand charge is usually much higher per kW than the regular demand charge, so customers who can reduce load during system peak hours can save significantly even if their overall monthly peak stays the same.