Demand Charge FAQ

Demand refers to the amount of electrical power needed at a specific time. Rather than being about monthly consumption, demand reflects the maximum power needed at any given time. For example, if you turn on several high-energy-consuming appliances simultaneously, such as the heater, oven and washing machine, your demand at that moment spikes.

Peak demand, our highest need, impacts the cost of wholesale power. We must have enough capacity to meet the power demand of all homes and businesses, even when that demand spikes. For Wiregrass ElectricCooperative, this peak occurs consistently from 6 to 9 a.m. during winter.

Every residential account will see a residential demand charge on its bill. This charge reflects your household’s contribution to WEC’s highest electricity demand during peak hours, from 6-9 a.m. in the coldest months. Currently, the rate is $2.50 per kilowatt, or kW. Beginning in March, that rate will increase to $4 per kW.

For example, if your household reaches a maximum demand of 10 kW during this peak period, your bill will include a $25 residential demand charge ($2.50 x 10 kW = $25). Thanks to advanced metering technology, this demand rate is calculated using precise data.

The residential demand charge is tied to the fixed costs associated with meeting peak demand year-round. Even though technology and energy efficiency have improved, peak demand hit an all-time high on Dec. 24, 2022, which led to higher capacity costs in 2023.

Thanks to demand pricing signals, communication and the participation of members like you, our system saw a lower peak in the winter of 2024. However, demand costs remain high due to factors like inflation, national policy and regulations and other economic conditions.

To ensure reliable service and promote the long-term financial health of our cooperative, we’ve adjusted our rate structure related to demand. Billing for residential demand creates a fairer way to cover a portion of these costs, benefiting all members.

Billing for demand helps us more accurately reflect the true cost of providing electricity to residential members. Demand plays the biggest role in determining our wholesale energy costs, including the cost of maintaining the electrical grid and the price we pay to our power supplier, PowerSouth Energy Cooperative.

By billing based on residential demand, we aim to distribute these costs among members more fairly. Households are charged according to their precise contribution to peak demand rather than applying the same charge to everyone. This approach keeps rates fair and supports the long-term stability of our cooperative.

Billing for demand supports WEC’s mission of providing reliable and affordable energy. As a power distributor, we are required to purchase enough capacity from PowerSouth to meet members’ needs, even during moments of highest demand. This strategy also aligns with cooperative principles, encouraging long-term stability and ensuring everyone pays a share tied to their contribution.

The residential demand charge represents our commitment to individualized rates reflective of actual demand. Simultaneously, we’ve reduced our base energy rate—the price you pay for total energy consumption—by 10%. This is designed to encourage members to reduce their demand to save on their bills.

Yes, you can actively contribute to lower peak demand on WEC’s system during the winter months from 6 to 9 a.m. Here’s how you can make a difference:

• Install a water heater timer: By controlling when your water heater operates, you can avoid using it during peak hours.
• Use a programmable thermostat: Setting your thermostat to lower temperatures during peak demand times can make a significant impact. With smart thermostats, you can control your thermostat from your phone even when you’re away.
• Delay high-energy tasks: Activities like washing and drying clothes or running the dishwasher can be shifted to non-peak hours.
• Unplug unused devices: Even if turned off, many electronics still draw power. Unplugging them can reduce unnecessary demand.
• Use energy-efficient appliances: Consider replacing old appliances with energy-efficient ones that operate at a lower capacity.
• Install LED bulbs: LED bulbs consume less energy than traditional bulbs, reducing demand.
• Insulate your home: Proper insulation keeps warmth in and cold out, reducing the need for heating during chilly winter mornings.
• Seal windows and doors: Drafty windows and doors can cause your heating system to work harder. Sealing them helps maintain temperatures.
• Monitor energy consumption: Regularly check your energy usage on your account on our website or through the Wiregrass Electric mobile app, and adopt habits to lower your demand.
• Charge during off-peak hours: If you have an electric vehicle, avoid charging during the hours of 6 to 9 a.m. Consider downloading Optiwatt to help you manage EV charging hours.

Managing power costs is critical. Here’s how WEC and PowerSouth Energy Cooperative are
acting to curtail increases:

1. In a world of fluctuating fuel costs, we’re employing strategic hedging. By locking in gas prices at favorable rates, we’re guarding against unpredictable spikes. It’s a bit like buying insurance against a sudden rise in costs.
2. A power purchase agreement with Vogtle Power Plant adds nuclear energy to our energy portfolio this year, promoting cost stability.
3. The new Lowman Energy Center, which utilizes the most efficient technology to date, leverages natural gas effectively.
4. We work with vendors to stock up on essential items when available and affordable, increasing our inventory thoughtfully, though it requires financial investment.
5. We keep a lean team. WEC’s service has grown, but our workforce remains modest with just 57 full-time employees, less than most similarly sized electric co-ops. We remain efficient and effective by using innovative technology to ensure reliable and quality service.
6. Every dollar counts. Thoughtful spending choices reflect our commitment to affordability without detriment in the quality of our services.

This year’s investments reflect our long-term thinking. We’re planning for tomorrow and the years ahead, guided by our commitment to providing reliable and affordable energy. Your continued trust and support make it possible.

We believe these strategies are a testament to that promise, and we thank you for your continued trust and support.

If you have any other questions or concerns, we’re here to help.