The Peak Use Charge applies to most residential and general service rates. It’s calculated using the highest or “peak” amount of electricity, measured in kW, that a member uses during a single hour within the peak hours of 6 to 10 a.m. and 5 to 9 p.m. over the billing period.
Here’s How It Works:
Your peak use each billing period is determined by the single highest hour of energy that you use during our peak hours. See the graph below to visualize an example of one single day of the month. Each bar represents the amount of energy consumed during a specific hour. Over the course of a month, some hourly bars for each day may be shorter, indicating low use, while others may be much taller due to high-demand activities like heating or cooling.
At the end of the billing period, the combined height of all bars, across all days, reflects your total electric consumption, measured in kilowatt-hours (kWh). Your peak use is determined by finding the single tallest bar, within peak hours, across all days. Peak use is measured in kilowatts (kW). Your peak use, however, is determined by the tallest single bar during peak hours, measured in kilowatts (kW). In the example graph, the red bar highlights this hour of highest energy use, during peak hours. That hour is used to calculate your Peak Use Charge. You may notice there is a taller gray bar, but because it is outside of peak hours, it is not used to calculate your Peak Use Charge. For residential members, the first 5 kW of peak use is provided at no cost. Any use above that threshold is billed at $6 per kW.
Here’s an example based on the graph above:
As a traditional residential member, your peak use hour occurred on a day between 7 p.m. and 8 p.m. when your demand reached 9 kW. The first 5 kW are free and the remaining 4 kW are charged at $6 per kW, resulting in a Peak Use Charge of $24 for the month.
Watch Our Videos
Learn what demand is and what the peak use charge is by watching our videos below.
Listen to Our Podcast
Check out our podcast episode dedicated to explaining demand and peak use.
Why Is KEC Implementing a Peak Use Charge?
Despite Kootenai Electric Cooperative (KEC)’s ability to offer some of the lowest electric rates in the nation, the cost of purchasing power—especially during peak demand periods—has been increasing significantly over the years. While the cost of purchasing or producing power on our members’ behalf has long hovered between 42 to 45¢ of every dollar our members pay in rates, the portion attributable to purchasing power during these peak periods (referred to as “demand charges” within the industry) will increase from 18% today to nearly 25% in just 3 years.
For most utilities including KEC, peak demand periods typically occur between 6 to 10 a.m. and 5 to 9 p.m., when households are preparing for work, cooking meals, or returning home. These concentrated periods of high use drive up costs, which must be recovered more equitably than our former rate design permitted. Crucially, more so now than ever, it is essential that utility rates create price signals and incentives related to the underlying cost of the electricity being used. Stated differently, the rates KEC charges for electricity needed to be revised to account for the growing cost of demand and the impact these demand charges have had on our total cost of operations.
The Peak Use Charge is applicable to the following rate schedules:
How Can I Reduce My Peak Use Charge?
Members can minimize the costs they experience by reducing their energy use during peak hours. Below are some tips on how you can reduce your electric use during peak hours:
Use KEC’s Energy Insights
KEC is pleased to announce the launch of enhanced energy insights now available to members through SmartHub, our online account management portal.
Access Energy Insights
Utilize Off-Peak Energy Times
Plan energy-intensive chores and tasks, such as running the dishwasher or washing clothing, during off-peak energy hours, when the demand for electricity across the grid is lower. Off-peak times are early in the morning, mid-day, or late evenings. By scheduling these activities during off-peak periods, you can help keep your costs lower, reduce demand, and relieve pressure on the grid.
Spread Out Energy-Based Tasks
A strategy as simple as just running one major appliance at a time during peak hours can make a big difference. For example, laundry and dishes can be washed at different times from when meals are being cooked to avoid running multiple major appliances at one time.
Use a Programmable Thermostat
The thermostat is one of the best places to lower your energy use because heating and cooling account for a significant portion of home energy consumption. Program your thermostat for the winter months and adjust to the lowest comfortable setting to reduce energy use. The Department of Energy recommends 68 degrees or lower.
Seal Your Home
According to ENERGY STAR®, about 20% of heated or cooled air that moves through a home is lost due to a lack of proper insulation and air leaks. Ensure your home has sufficient insulation levels and seal air leaks around windows and doors with caulk and weatherstripping. This is a simple, effective way to lower energy use and improve indoor comfort.
Use Timers
Consider setting timers to run your dishwasher, clothes dryer, and other appliances outside of peak hours.
Timers can also be added to hot water heaters, pool pumps, and hot tubs to ensure they do not cycle on during these times.
Program Your Electric Vehicle (EV) to Charge Off-Peak
To charge an EV during off-peak hours, schedule charging using your vehicle’s app or infotainment system to take advantage of off-peak hours.
What’s the Difference? kW vs. kWh
Kilowatt (kW)
A kilowatt is a unit of power equal to 1,000 watts. It measures the amount of power or the rate at which energy is used or produced.
Kilowatt-hour (kWh)
A kilowatt-hour is a unit of energy. It measures the amount of energy used or produced in an hour. For instance, a 1 kW heater that runs continuously for 3 hours will use 3 kWh of energy.
In Summary
When everyone uses electricity at the same time, it puts a strain on the grid and drives up costs.
The point of highest energy use throughout the day is called peak demand.
For most utilities, including Kootenai Electric Cooperative (KEC), peak demand periods typically occur between 6 to 10 a.m. and 5 to 9 p.m., when households are preparing for work, cooking meals, or returning home.
KEC’s power suppliers charge more during these concentrated periods of high use, which means overall costs go up.
Your highest single hour of use during the peak demand periods determines your Peak Use Charge for the billing period.
You can minimize your Peak Use Charge by spreading out your electricity consumption or shifting it to non-peak hours.