Photo courtesy of the U.S. Geological Survey "Triangulation, summit of Sultan Mountain. Wilson and Rhoda. Colorado. 1874."

Why you don't have to worry about peak demand charges every day.

Peak demand charges are speeding tickets for your building, and can drive 40% of your monthly bill. But this doesn’t mean you have to look out for them every single day. In fact, most days, you can basically ignore them. In this “Pro tip” post, we’ll dig into how Snapmeter makes this possible.

First, a brief refresher on demand charges. Most commercial energy users are charged for both the amount of energy used in their building (like you pay for the amount of gas you put in your car) and the highest rate at which they used it (like a speeding ticket).

It shouldn’t be surprising that the devil is in the details here: utilities differ how they levy demand charges. However, they typically charge based on the single highest demand reading over the course of a billing period. [For buildings in LADWP territory, see this post for details on how the City of Angels holds its grudges for an entire year.]

Is it going to be really hot next Friday? Is next Friday within your current billing period? How does next Friday compare to that scorcher two Wednesdays back? Answers to these questions, and more, are the foundation of peak demand management.

Snapmeter platform

With summer-season demand charges 3X more costly, shaving even 3% off of peak demand has a leveraged impact on lowering your utility bill.

Snapmeter connects to your building’s smart meter interval data–without hardware in the mechanical room or software on the BMS–directly through your utility’s website. It pairs this interval meter data with utility bill and local weather station data to formulate a statistical model of your building’s energy use (how much electricity your building uses across different weather scenarios, calendar days, and times of the day).

It is this statistical model of your building’s load curve that powers the predictive analytics which change peak demand management from a daily concern into a source of significant bill savings.

Every Monday morning, Snapmeter sends Gridium buildings an email report summarizing the building’s energy use and utility charges for the current billing period, recapping the prior week’s energy use–including excess off-hours use and anomalous changes to startup/shutdown times–and alerts for new peak demand charges in the upcoming week, if any are predicted:

Snapmeter email

Since Snapmeter is connected to both your billing data and your meter data, it knows where you are in your billing period and what peak demand level your building has already set during this same billing period (and how your building tends to use energy differently on each day of the week, in different weather conditions). In the load curve image above, days left in the billing period is shown in the lower left corner. In the email report image directly above, days left in the billing period is shown in the upper right hand corner. Snapmeter also knows that a building is more likely to set its peak demand on the last day in June rather than the first day in June, similarly it knows a building is more likely to set a peak on the first day in October rather than the last day in October.

So, your building may run fairly high on Fridays, particularly when it’s hot out. But Snapmeter knows how this Friday’s likely peak compares to every other day in the currently billing period. If this Friday in question falls outside of the current billing period, Snapmeter is calibrated to know how that day of the month compares to other days in the rest of the month. Without big-data analytics placing this Friday’s energy use in context of your utility’s tariff schedule and prior peaks set within the billing period, you can’t know whether to worry about setting a new peak demand charge or to forget about it.

Have questions? Let us know, and we’ll set up a free trial of Snapmeter so that you can see it work on your own building’s data.

About Millen Paschich

Millen began his career at Cambridge Associates, trained in finance at SMU, and has an MBA from UCLA. Talk to him about bicycling, business, and green chile burritos.

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