Do you ever wonder why utilities are always encouraging you to use less electricity during certain periods of the day? These periods are often called peak periods where there is a high demand for electricity. Supply and demand play a critical role in the cost of electricity. Understanding how the demand and how you can control this will ultimately help lower your energy bill.

To start, it is important to understand how electricity is made and how it is delivered to your home. Before your energy provider can send electricity to your home, that electricity needs to be generated. Cooperatives generally purchase power from a Generation and Transmission (G& T) utility. Once electricity has been generated, it travels over high-voltage transmission lines to substations, where the voltage is reduced to a safer level. The electricity then travels over distribution power lines and finds its way into your home. So, while you pay your bill to your local utility, they don’t often generate the electricity you use. That is the job of the G& T.

Local utilities help determine how much electricity their customers need to power their homes and businesses, and customers play a big part in determining how much electricity the G& T needs to create to keep the lights on in a community. That is where the terms “consumption” and “demand” come in. A G& T must ensure they have enough capacity to meet these demands, otherwise customers could be a part of brown out, which happened in California a few years ago.

Consumption is measured in kilowatt hours (kWh). Demand is measured in kilowatts (kW). A lightbulb “consumes” a certain number of watts, let’s say 100 watts per hour. If that lightbulb stays on for 10 hours, it “demands” a certain number of kilowatts (in this case, 1 kW) from the generation station producing electricity. Now, if you turn on 10, 100-watt lightbulbs in your home for one hour, you are still consuming the same number of kW. However, you are placing a demand on the utility to have those kW available to you over the course of one hour, instead of ten. This requires the G& T plant to produce more power in less time to meet your demand.

Utilities purchases kilowatt hours from the G& T based on the average demand of its customers. Peak demand refers to the time of day when the demand for electricity is highest. This is typically during the afternoon and evening as families return home from work or school, cook dinner and use appliances the most. Using electricity during this peak demand period often costs more to both the utility and its customers. Demand is considerably higher for utilities during these hot summer months.

There is an easy way for everyone to lower demand, and thereby lower the strain on the electric system for all utilities. When customers shift their non-essential electric use to nonpeak periods, demand is lowered on the electric grid. Simple things like doing laundry early in the morning, using a grill to cook supper, or using the dishwasher after 7:00 PM, can make a big difference in the demand for each utility, and save consumers money.

Demand is the reason your electricity bill fluctuates season to season and even year to year. Generating and distributing power can be a tricky and complicated business but every one of us can help make a difference in the costs associated by reducing our demand.