Industrial power billing can be tricky. When I worked for HRSD, the treatment plants had a few ways to cut that peak demand charge, which was based on the highest power use in a 15 minute interval during peak billing hours, which iirc was 10am-10pm from Monday-Friday. Basically, off-peak hours, you could use whatever you wanted and just get billed for usage. On peak, you had to watch what loads you ran. Because of this, one of the plants I worked at ran their centrifuges, a 350HP load, from 11pm-7am.
Demand charges are there because the POCO has to be able to supply whatever you draw off the grid. Demand charges pay for the infrastructure. Cutting that peak, or peak-shaving, can be done by running high-draw loads off peak hours, cycling loads, or paralleling a generator to the grid.
For example, during high-flow (hurricane, nor easter) conditions, Nansemond plant cannot gravity flow to its outfall, requiring a 700 HP pump to be needed, a very substantial additional portion (~30%) of the plant's normal power use (1300kw-hr). Because they werent VFD and the final wetwell not very large, typically this pump was run wide open with a 5 on, 25 off timer. Since the demand is based on a 15 minute interval, that 700HP motor running in 5 minute spurts was more like a 235HP motor. If it needed to be run more, it could be run as much as 5 on, 10 off, which also limited its starts to 4/hour (high but acceptable from the motor mfg based on field measurements - typically, two pumps were used and cycled back and forth to limit starts/hour/pump). It was not run 10 on 20 off as that would cause a larger demand, one that you get to pay for for the entire year.
I've mentioned here before the incident at VIP plant where maintenance running 2 1000HP aeration blowers for 45 minutes resulted in a new high demand and $52,000 extra power bill. HRSD complained, and eventually Dominion removed the charge but told HRSD that would be a one-time favor, to train the plant personnel on power billing, as any new high demands would be billed out and have to be paid for.
Ethan, it was very good of the POCO to remove the demand billing. Istm that they re-evaluated your customer and put their billing rate into more of a residential/commercial tier.
