Peak Demand
Every winter morning, we wake up, turn up the heat, take hot showers, make breakfast, and turn on appliances, gadgets and devices before heading out for the day. In the evenings, we return home and run through a similar routine of cooking, running appliances, using hot water, watching television and using our home computers and devices until bedtime. These daily routines create electrical consumption peaks between 7:00 to 9:00 am and 5:00 to 7:00 pm.
What is peak demand?
Peak is the highest one-hour load requirement on the electric system. The lower or warmer the exterior temperature, the more electricity we use to stay warm or cooler in our homes and businesses. A peak demand charge is calculated through the wholesale power purchase agreement Nelson Hydro has with FortisBC. Peak demand charges occur when a new high or maximum demand of energy has been hit by Nelson Hydro customers. This typically occurs on the coldest day(s) of the year from 5:00 to 7:00 pm during winter months. When the maximum or peak is set, the power agreement automatically calculates electricity charges at that level for 11 months. So the less our customers use, the less money we pay to FortisBC, and the less charges we pass along to our customers.
Why is peak demand important?
Reducing your energy load during peak power times is beneficial to everyone and can actually save you money. When we reduce peak demand charges from FortisBC, Nelson Hydro's power purchase budget for wholesale electricity is reduced. This also reduces the likelihood that electric rates are increased. Try to save your dishes, laundry, and EV charging until the later evening or overnight.
Why doesn't Nelson Hydro just make more power?
Water that flows down the Kootenay River is 100% allocated by the BC Controller of Water Rights to BCHydro, FortisBC and Nelson Hydro. Nelson Hydro has been granted 2,963cfs of the 46,023cfs of the hydrogeneration output of the Kootenay River. There is no option to increase our water license. We generate electricity to the maximum amount permitted within our water licence, and then the remainder of the electricity is purchased from FortisBC.
On Saturday March 22nd, Nelson Hydro had a peak demand challenge to improve awareness of energy use and consumption from 6-7pm to align with Earth Hour. It was forecasted that the hourly demand from 6-7pm would be 27,800kVA based on consumption history over the previous week given actual weather and forecasted weather for Saturday night. The actual hourly peak consumption from 6-7pm was 23,032.20kVA. This was more than a 10% reduction in demand and 3 lucky contest registrants were drawn to receive a $100 credit on their next Nelson Hydro electric bill.
On January 13th, 2024 at 6:00 am, the temperatures dropped to a record-breaking temperature of -21.8°C. Twelve hours later at 6:00 pm that night, Nelson Hydro hit a new peak demand of 45,019 kVA. This new peak will increase the power purchase budget by an additional $530,000 over the next 11 months of 2024 due to the cold weather experienced that day. These peak demand charges impact all customers eventually as budget shortfalls need to be recovered.
How does demand work for commercial customers?
Demand meter measure two different values: 1) Your electric energy consumption in kilo-watt-hours (kWh). Consumption is the cumulative amount of energy delivered over a period of time. 2) Your power demand in kilo-volt-amperes (kVA). Power is how fast the energy is being consumed by the service at any moment.
The demand reading of the meter, kVA, records the highest amount of power delivered to the service within the billing period. Every month, a customer’s demand charge is calculated as the demand reading for that month, or 75% of the highest demand reading in the past 11 months, whichever is greater.
Here is an example of how demand works. During a month, a typical household consumes 1000kwh but this does not show how much power is being used at 5:00pm when all appliances are being used (furnace, stove, oven, washer, dryer, hot water tank, etc.). During this hour from 5:00-6:00pm the demand for power to run all the appliances is at its peak of 50kw. And on the coldest day of the month, the peak demand is set at 55kw. This peak demand rate of 55kw will be billed for 11 months.
What should I do?
By making small changes in our energy routine, we can spread our use of electricity throughout the day and beat the peak without compromising comfort or convenience. Small changes at home can reduce your monthly bill and the load on our system at peak times. Reducing your power bill doesn't always require major investments.
For home upgrades like improving insulation or replacing old windows, help is available through a variety of provincial and federal energy-saving grants and programs. All RDCK and City of Nelson residents are eligible for energy rebates through FortisBC and they are welcome to register for the Regional Energy Efficiency Program (formerly EcoSave) for more information and support. To learn more, please visit: www.nelson.ca/ecosave
I've been making changes, but don't see a major difference in my bill. Why's that?
Your electricity consumption includes many factors: the weather, the number of people in your household, your home and appliance's energy efficiency rating, and how you heat your home (gas, electric or wood). For Nelson Hydro, every bit of electrical savings helps avoid those new peak demand charges. So your efforts are appreciated. To learn more about getting your home's energy efficiency rating, please register for the Regional Energy Efficiency Program (formerly EcoSave) at www.nelson.ca/ecosave.
Are there incentives for lowering power consumption?
No, not yet. Some utilities use smart meters to offer time-of-use rates to incent customers to reduce their consumption during peak hours. In December 2023, BC Hydro was approved to offer time-of-day pricing to its customers using smart meters. Nelson Hydro does not have smart meters installed in its service territory but is considering a project within the next five years. Thank you for your cooperation — reducing peak demand contributes to lowering electricity bills for everyone.