What are demand charges and how do they differ from a traditional pricing structure?
A demand charge is calculated based on the time of day a customer uses electricity and how much they use during that time. Traditional pricing structures typically consist of a fixed charge and a usage charge. Cost reflective pricing introduces a demand charge combined with a lower usage charge enabling customers to reduce their bills by reducing their demand. This pricing structure rewards those who shift their electricity use to off-peak times to help reduce peak demand. Reducing peak demand helps to drive down electricity costs for all users of our network in the future.
How will you measure my demand?
Demand is measured in kW (kilowatts) and is based on your maximum consumption within a 30-minute block. Each month your demand level will be reset.
What if I prefer the way I am charged now?
Currently, residential customers can ask for demand-based pricing or to switch off demand pricing by contacting us. This will be at the discretion of the network service provider.
Some network service providers have some good resources related to demand pricing
Ausgrid: An introduction to Residential Demand Tariffs and Demand tariff Q & A for residential customers
Citipower / Powercor: Demand Charges for Residential Customers FAQ