As a business, you know that your utility company charges you for how much energy you use each cycle. Energy is measured in kilowatt hours (kWh), and you pay for the total amount of kWh you've used for the month. That's the straightforward part of your energy bill. 

There's another type of charge that factors into how much you pay the utility company each month.

Many energy plans also include charges for peak demand.

Peak demand charges reflect the highest kilowatt usage during a continuous fifteen-minute period for the month.

Every appliance needs to draw a certain number of watts in order to operate, so the more stuff that's plugged in and turned on, the more watts of energy your restaurant needs in order to be operational. 

The "demand charge" is meant to reflect the amount of generation capacity the utility company reserves to make sure a business has enough energy.

And unfortunately, utility companies base this demand charge on your highest 15 minutes of usage during any given month.

Simply put, the utility company charges for how much energy capacity your business needs for the month.

So what is this costing you? Peak charges vary wildly from $1/kW to $20/kW. Typically, quick serve restaurants have peak demand levels between 20kW (Dunkin Donuts) and 120 kW (McDonalds). Depending on your rate plan and your size, your peak demand costs can be quite different.

2. What Causes Your Peak to Increase? 

When your restaurant's energy use spikes, your peak usage can spike too

  • When many appliances are on at one time -- during breakfast or lunch rus
  • When employees start up several appliances at the same time (appliances often use more energy during their start up cycle)
  • When an appliance is rapid cycling and may be about to break
  • When employees overuse high-demand appliances.

Many variables can cause your peak demand to increase.

When one small factor changes in a month, your demand charge can spike significantly.

For example, if a rapid cycling freezer causes peak to spike one month, you could be stuck paying inflated charges the next month.

3. How You Can Help You Keep Peak to a Minimum

You need to have some process to detect abnormally high spikes in energy use. This helps you minimize demand spikes, and could save you hundreds of dollars a month.

For example, PlotWatt's patent-pending algorithms also tell you whether those energy spikes are normal based on your store's unique operating behavior. But unless you love overpaying, you need will need to acquire more knowledge about your location's energy spikes.

This knowledge makes you aware of the critical time periods when your demand spikes occur so that you can easily lower those spikes. Because PlotWatt provides daily feedback on your energy spikes, you can keep track of the highest peak for your billing period.

This helps you change your behavior much more quickly so that you don't set a new peak and waste money paying for that abnormally high peak the next month.

Not knowing about your peak can cost you big. PlotWatt hands you the information you need to put hundreds of dollars back in your pocket each month.  PlotWatt is compliance that pays.

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