Georgia Power Demand Charge

Georgia Power Demand Charges

Georgia Power Demand Charges Explained

Georgia Power’s demand charge is a pricing component designed to reflect the cost of providing electricity during peak usage periods. It’s especially relevant for commercial and some residential customers under specific rate plans. Here's how it works:

What Is a Demand Charge?

Demand refers to the highest amount of electricity (in kilowatts, kW) you use at any one time during a billing period.
Unlike energy charges (based on total kWh used), demand charges are based on your peak usage, even if it’s just for a short burst.

How Georgia Power Calculates It

Peak Demand Measurement:
- Georgia Power monitors your electricity usage in 15-minute intervals.
- The highest 15-minute average usage during the billing cycle becomes your demand charge basis.
Rate Plan Dependent:
- For commercial customers, demand charges are standard.
- For residential customers, demand charges apply if you're on a Smart Usage or Residential Demand Rate plan.
Monthly Demand Charge Formula:

Code

Demand Charge = Peak kW × Demand Rate ($/kW)

Example: If your peak demand was 10 kW and the rate is $7/kW, your demand charge would be $70.

Residential Demand Rate (Opt-Out for New Homes)

Since 2021, new residential customers in Georgia may be automatically enrolled in a demand-based rate plan unless they opt out.
This plan encourages load shifting—avoiding running multiple high-energy appliances at once—to reduce peak demand and save money.

Why It Matters

Demand charges reward customers who spread out their energy use rather than spiking it.
Businesses with large equipment or homes with high simultaneous usage (e.g., HVAC + oven + washer) can see higher bills if not managed carefully.

Here's a breakdown of what a Georgia Power commercial bill typically looks like, with a focus on the demand charge section. While we can’t show you an actual customer’s bill, Georgia Power provides a helpful interactive bill explainer. Let’s walk through a realistic example:

Sample Georgia Power Commercial Bill Breakdown

Charge Type

Amount

Details

Energy Charge

$4,500.00

Based on total kWh used (e.g., 45,000 kWh × $0.10/kWh)

Demand Charge

$1,200.00

Based on peak demand (e.g., 150 kW × $8.00/kW)

Fuel Cost Recovery

$300.00

Adjusts for fuel price fluctuations

Environmental Compliance

$150.00

Covers regulatory compliance costs

Franchise Fee

$100.00

Local government fee

Sales Tax

$350.00

Varies by location

Total Bill

$6,600.00

Demand Charge Details

Measured in kW, not kWh.
Calculated from the highest 15-minute average usage during the billing cycle.
Encourages businesses to spread out energy use and avoid simultaneous high-load operations.

Lowering your demand charge can lead to serious savings, especially for commercial customers on Georgia Power’s demand-based rate plans. Since demand charges are based on your highest 15-minute usage spike during the billing cycle, the goal is to flatten your load profile and avoid sudden surges. Here’s how to do that:

Smart Strategies to Reduce Demand Charges

1. Stagger Equipment Use

Avoid running multiple high-power devices at the same time.
Schedule HVAC, compressors, ovens, and other heavy equipment to operate in sequential blocks, not simultaneously.

2. Install Energy Management Systems (EMS)

These systems monitor and control energy use in real time.
They can automatically shed or delay non-essential loads during peak periods.

3. Use Battery Storage or On-Site Generation

Batteries can discharge during peak demand to reduce grid draw.
Solar + storage setups are especially effective for shaving peak loads.

4. Shift Usage to Off-Peak Hours

If your rate plan includes time-of-use pricing, shift operations to early morning or late evening.
Run dishwashers, laundry, or charging stations during off-peak times.

5. Upgrade to High-Efficiency Equipment

Motors, HVAC systems, and lighting with lower power draw reduce overall demand.
Look for ENERGY STAR® or high-efficiency ratings.

6. Conduct a Load Profile Analysis

Work with Georgia Power or an energy consultant to identify your peak usage patterns.
Target the specific time blocks where demand spikes occur.

7. Employee Training

Educate staff on the cost impact of demand charges.
Encourage energy-conscious behavior, like turning off unused equipment.

In Georgia, the average commercial electricity usage is approximately 6,991 kWh per month. This figure places Georgia 10th in the nation for commercial energy consumption, and it’s about 12% higher than the U.S. national average of 6,238 kWh/month.

What Does That Mean in Terms of kW?

To estimate average kW demand, we can use a rough conversion:

If a business uses 6,991 kWh/month, and assuming a 30-day month:

Code

Average daily usage ≈ 233 kWh/day

Average hourly usage ≈ 9.7 kW (assuming 24-hour operation)

But most businesses don’t operate 24/7. If we assume 12 hours/day of active usage:

Code

Average hourly usage ≈ 19.4 kW

So, a typical small-to-medium business in Georgia might have an average demand between 15–25 kW, depending on operating hours and equipment.

Commercial Categories by Georgia Power

Georgia Power classifies commercial customers by demand levels: