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1 UNDERSTANDING YOUR ELECTRIC BILL A GUIDE FOR BUSINESSES IN North Carolina Duke Energy 550 South Tryon Street Charlotte, NC / Duke Energy Corporation LU 6/13

4 Understanding ELECTRIC demand INTEGRATED DEMAND A demand meter measures the maximum 30-minute integrated kilowatt demand during the applicable billing period. Since the demand measurement is integrated, or averaged over each 30-minute period during the billing month, short periods of intense use, such as the start-up of a motor, may have minimal impact on the registered demand. At the end of the billing period, Duke Energy records both the kilowatt-hour and the maximum 30-minute integrated kilowatt demand readings from the meter. The demand register is then reset so it can measure maximum demand for the following billing period. Example: 30 Minute Integrated Demand Profile This example illustrates how demand is calculated for an office with about 4,500 square feet of space, during the summer. metering electric energy and demand The meters used at residences and some small businesses register only electrical energy usage in kilowatt-hours (kwh). The meter continuously measures the number of kwh used. At the end of each billing period (typically 30 days), a kwh reading is obtained from the meter. The previous month s reading is then subtracted from the new reading to determine kwh consumption. In some cases, the meter registers only a portion of the kwh used, and a multiplier is used to determine actual usage. The multiplier, if applicable, is shown on your billing statement. Meters at most businesses, however, measure both kilowatt-hours (energy) and kilowatts (demand). Kilowatts measure the average rate at which kilowatt-hours are used during a certain time interval. The time interval used by Duke Energy is 30 minutes. Example: If a 10-kW electrical load (like a commercial oven) is operated for 30 minutes, the demand register on the meter will record 10 kw. During this same 30 minutes, the kwh register on the meter will record the use of 5 kilowatt-hours (10 kw x ½ hour = 5 kwh). The demand register will retain this 10-kW demand unless higher demand occurs during any subsequent 30-minute interval during the billing month. For the first 10 minutes, the lights are on and the cooling system is running. During the next 5 minutes, the air conditioning system cycles off, but several pieces of office equipment (computers, printers and a copy machine) are in use. During the last 15 minutes, all the equipment is in use and the air conditioning system cycles on. The resulting integrated demand for this 30-minute period is illustrated below. Demand (kw) Time (Minutes) Demand (kw): Lights & Cooling Lights & Equipment Lights, Equipment & Cooling 30 kw x 10 minutes + 18 kw x 5 minutes + 36 kw x 15 minutes = 30 minutes 30 minutes 30 minutes 10 kw + 3 kw + 18 kw = 31 kw Even though the maximum demand was 36 kw, the integrated demand is only 31 kw for this 30-minute interval. 6 See the Glossary on Page 12 for definitions of terms appearing in bold. 7

7 Glossary of terms Actual demand Maximum integrated (average) demand used by a customer during a billing period. Under Duke Energy s rate schedules, the demand is averaged over a 30-minute period. Ampere Unit of measurement of electric current. Basic facilities charge A monthly charge based on costs associated with metering, meter reading, billing, etc., exclusive of demand or energy consumption. Billing demand The demand value used for billing purposes on the customer s monthly bill. Demand The rate at which energy is delivered, measured in kilowatts (1,000 watts) and averaged over 30-minute intervals. Glossary of terms (continued) Multiplier Used to calculate actual usage for meters that register only a portion of kilowatts or kilowatt-hours used. The meter multiplier is normally shown on the face of the meter and is shown on the bill. Tariff A document filed by a utility with a regulatory commission, listing the rates the utility will charge to serve its customers, along with terms and conditions. Volt Unit of measurement of electromotive force. Watt The electrical unit of real power. The rate of energy transfer equivalent to one ampere flowing under an electrical pressure of one volt at 100 percent power factor. The rate of energy consumption. Economy demand On a time-of-use rate, the amount by which the maximum off-peak demand for the month exceeds the on-peak demand. Energy The amount of electricity a customer uses during the billing period, in kilowatt-hours (kwh). In some cases, an electric meter registers only a portion of the kwh used, and a meter multiplier must be used to determine the customer s actual usage. Any multiplier, if applicable, is shown on the customer s bill. fuel adjustment clause An adjustment to a customer s bill used to recover Duke Energy s cost of fuel used to generate electricity. The state utility commissions conduct annual proceedings to evaluate fuel costs. After review, the commissions may order that rates increase or decrease to reflect changes to the cost of fuel only. Kilowatt (kw) A unit of electric demand or capability. Kilowatt-hour (kwh) A unit of electric energy. kw x hours= kwh Load Factor The ratio of the average electrical load divided by peak load during a designated period of time, expressed as a percent. As an example, if a business used 10,000 kwh during one month (720 hours) and had a maximum demand of 25 kw, then the load factor would be 56 percent. {10,000 kwh/(720 hours x 25 kw)} x 100% = 56% 12 13

8 14 15 notes

UNDERSTANDING YOUR ELECTRIC BILL A GUIDE FOR BUSINESSES IN South Carolina Duke Energy 550 South Tryon Street Charlotte, NC 28202 www.duke-energy.com 2013 Duke Energy Corporation 12-1484LU 6/13 TABLE OF

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