Understanding Your Energy Bills: Part 2

Taxes, Fees, and Peak Demand

For the second installment of our understanding your energy bill blog posts we wanted to focus next on taxes, fees, and peak demand. These three things are often overlooked and avoided because they are seen as non-negotiables, and cannot be changed. While some of that statement is true, you can adjust your activities to ensure you aren’t being charged to the fullest of the electrical company.

Taxes

First to dive into taxes on electricity. Just like any other tax, it changes, and it changes often. The electric companies need to increase capacity, and therefore, we are continuing to see the fees and taxes reflect that in ours. Tax rates vary depending on the utility company, state, and other factors like weather and prices of gas and oil. Depending on the state you live in the taxes could vary, for example, if you live in one of the states that were recently affected by the hurricanes you could be charged a storm charge fee that helps repay the hurricane restoration efforts. A typical fee and tax that are more common on energy bills are fuel charge. This coincides with the price of oil and gas, depending on how those two commodities fluctuate depends on how that will reflect on your bill. Another consideration is that local municipalities often add charges to fund various efficiency or generation programs as well. Taxes and fees vary year-over-year, and with all those little charges put together, it can equal a substantial sum.

Peak Demand

Let’s talk about what peak demand is exactly. Peak demand is the time of day that electricity is most expensive because of the demand. Most people are using electricity at this time so the electric power systems must match generations and load in real time. What this means regarding charges is that if your consumption is too high at any given moment (typically a 15-minute window), you will be charged extra peak demand rates. Usually, you will see that demand increase for the billing cycle not just for that single day, sometimes it can even reflect for the entire year.

Solutions

While there is not a lot, you can do about the taxes that appear on your energy bill you can still mitigate your peak demand charges by lessening the amount of electricity used during those busy periods. Demand response programs are being used more widely to empower customers to take their electric use into their own hands and to help balance the supply and demand. Some power companies also get direct load control which allows them to cycle on and off air conditioners and water heaters during peak demand.

Automation is always an answer in this case. Installing an EMS system to automate all of your critical systems in your facility is an affordable way for you to lower your bills and increase your operational efficiency. Controls on walk-in coolers and freezers can cut defrosts during peak demand periods along with automating air conditioners to run more efficiently during those times as well.

Leave a Reply

Small Box Energy’s COVID-19 Response

In response to the COVID-19 pandemic, Small Box Energy has implemented Safety and Operational Continuity measures to minimize the impact on our employees and our clients.

Our systems and platforms enable team members to work remotely. Therefore, our support team will continue to be available 24/7 via phones, email, and our support ticketing system in our app and on our website, www.smallboxenergy.com.

For our clients who are modifying operations and/or hours of operation, we are ready to help in any way possible. Our team has been working on strategies and best practices for using our platform to keep you connected to your facilities and your operations running efficiently. We will work closely with you and your team to make necessary adjustments to accommodate your individual situation.

We will continue monitoring the evolving COVID-19 situation and take necessary actions to ensure continued service to our valued partners. Rest assured; we are prepared to serve you.

Contact Information:

support@smallboxenergy.com

info@smallboxenergy.com

sales@smallboxenergy.com

(480) 253-3999
(855) 825-0123 (Option 4 for support)