What is a demand charge rate (price per kW)?

Costs incurred by the PUD in providing electric service can be separated into the following categories:

  • Energy costs that vary with the total consumption (flow) of electricity over a specific period of time. Consumption of energy is typically measured in kilowatt-hours (kWh).
  • Demand costs are related to the maximum rate of use required at a point in time. These costs are associated with oversizing infrastructure to meet peak demands. Demand is typically measured in kilowatts (kW).
  • Customer (Basic) costs are costs associated with having a customer on the system. These costs vary with the addition or deletion of customers, and not consumptive use.