Welcome to Sioux Valley Energy's Business PowerUP monthly newsletter, which focuses on how energy impacts your business. When I visit with our large power members, similar questions will often arise, such as, "what is the difference between energy and demand?" In this month's edition, we explore that question and much more. Also, we developed a podcast which we are calling Inside the Grid to provide broader discussion and expand on important issues. The first edition of Inside the Grid focuses on Energy 101 and on siting electric services for new construction or facility expansion.
Next month, we’ll look at beneficial electrification.
If you have suggestions for future issues or wish to discuss your operation’s current and future energy needs, please contact me at jay.buchholz@siouxvalleyenergy.com or call my cell phone at 605-940-2053.
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Energy, Demand and Basic Service Charges |
Sioux Valley Energy large power members are billed on three components: energy, demand, and basic service. The energy charge is based on how much total electricity you use over a one-month period. The demand charge is based on the highest electric usage measured during a half-hour period at one point in the month. The basic service charge is based on the size of the transformer but helps pay for all the distribution equipment, including poles, wires, cables, etc., which are required to get electricity to your business. |
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Businesses will often ask the cooperative how they can reduce the cost of their electricity. One way to do that is by decreasing demand. Sioux Valley Energy must secure enough power generation and transmission capacity to supply its members the maximum amount of electricity they would need at any given time.
How and when a business runs its equipment influences the operation’s demand. If a business can spread its electrical use throughout the day, instead of using a lot of it at one time, there will be less demand. The higher your demand is, the more power generation and transmission is required to meet that electric peak—making it more expensive.
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What is energy and demand and how does it impact your electric bill? Let’s use a water analogy. If you are filling a five gallon bucket over a period of five hours, that water usage is spread out evenly and it doesn’t take a very large pipe. However, if you are trying to fill your five gallon bucket in one hour instead of five hours, it will take a much larger pipe with more pressure to fill the bucket. In this analogy, the five gallons of water represents the amount of energy (kwh) over a give period of time. The pipe represents demand (kW). You get the same amount of water (or electricity) in the end but what kind of pipe does it take to fill your bucket (or power your business) in the amount of time you want to use it?
Sioux Valley Energy bills demand based on your highest usage in the month during a half-hour period (how big of a pipe does it take to get that electricity to your business in that half-hour period). Decreasing peak demand is the best way to improve your load factor which can lower your electric bill. If you are able to spread that usage out over the month, instead of using a lot of it all at one time, your load factor will be higher and your demand will be lower resulting in savings. Take a look at your usage patterns. What equipment is running when your business hits its monthly half-hour peak? Can you avoid simultaneous operation of your equipment and spread the operation out over the month?
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In our inaugural Inside The Grid podcast, Jay Buchholz talks with two experts: Ted Smith, Sioux Valley Energy Vice President of Operations and Engineering, and Jason Sage, one of our lead staking engineers.
They will discuss energy basics, looking at the important differences between demand and energy and what it means to your operation. And, if you're looking to build or expand your operations, we'll explore the steps to making sure you get the power you need.
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Jay Buchholz, CKAE
Key Account and Community Relations Executive
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Ted Smith, P.E.
Vice President of Operations
and Engineering
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Jason Sage
Lead Staking Engineer
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Building New or Upgrading Your Facilities?
Give Us a Call Early on in Your Project
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If your business or operation plans to expand or build a new facility, be sure to give us a call early in the early planning stages.
“On larger projects, when an electrical engineer is involved, we provide information regarding fault current, how we would handle our metering and transformer installations. Every utility has different practices,” said Jason Sage, a lead staking engineer at Sioux Valley Energy.
“We work to come up with a plan that works for the business as well as the cooperative and can help ensure the electricians are bidding the project accordingly,” said Sage.
Part of this process involves meeting with the member, the electrician, and possibly the electrical engineer on-site to determine where the source of power will come from and determine a cable route or overhead line route into the facility. The project’s metering needs, as well as transformer placement, will also be discussed.
Involving the co-op early on in the process can help make sure equipment is the right size for the job that needs to be done.
Motors and fans are often major drivers in determining transformer size for manufacturing or dairy operations, while lighting, heating and cooling can be the most impactful load in other industries.
“In large power, our basic service charge is $1.20 per kVA. If you go too large, the customer could potentially be paying for a lot of transformer that they don’t really need. We want to do the best we can to size the transformer as accurately as possible,” said Sage.
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Things to think about before you call:
1 Where is the project located?
2 Are you in the planning stages or ready to start construction?
3 Who is your electrician?
4 Who is your builder?
5 Do you need single-phase or three-phase service? If three-phase, is it 208 voltage or 480 voltage?
6 What is the service size in amps?
7 Has the building site been staked for construction? When is construction set to start?
8 What type of heat will you be using?
9 What type of technologies are you planning to integrate or have an interest in? (EV ready, Level 2 or larger EV charging infrastructure), solar, wind, battery storage, biogas, back-up generator, etc.)
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Jay Buchholz, CKAE | Key Account and Community Relations Executive
Sioux Valley Energy | 1-800-234-1960 | www.siouxvalleyenergy.com
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Sioux Valley Energy is an equal opportunity provider and employer. |
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