What are demand tariffs?

Most large businesses are charged under a demand tariff. If your business uses more than 100MWh/year you may already be on a demand tariff or may be moving to a demand tariff in the future.  

As some of the existing tariffs are due to expire in 2017 and 2020, it’s in your interest to reduce your energy demand to lower your power costs.

On a demand tariff, you're charged:

  • The total amount of electricity you use, measured in kilowatt hours (kWh)
  • The maximum demand which is the amount of electricity in kilowatts (kW) you use, averaged over a 30 minute interval during your billing period
  • A service fee
  • A metering service charge.

Demand and energy charges could be fixed rates throughout the year, or could have seasonal (i.e. summer and non-summer) differences in both charges and time of day. Refer to your electricity bill or talk to your electricity retailer for more information on your electricity tariff structure and pricing.

One way to think of demand tariffs is like taking a drive in your car. One charge is for the total distance you travelled (or your total electricity usage), and another charge is for the fastest speed you reached (or your peak demand).

Make sure you understand how your demand tariff works. In particular, what time of day or year you are charged for peak demand.  You can then set reminders to use less electricity at those times to reduce your peak demand. You might choose to:

  • Switch off appliances
  • Run them at different times
  • Switch to appliances that use less power.

How to measure peak demand

Understand how your demand tariff works. Check for peak and off-peak periods, or a minimum demand threshold below which you don’t incur extra charges.  Then you can put in place practical measures to reduce demand during those times. 

The following graph shows how to measure the peak demand of your business.

How to measure demand

More information on demand tariffs is available on the Ergon Retail Compare business tariffs webpage. Market customers (i.e. not a customer of Ergon Energy Queensland) should seek more information on how demand tariffs are charged from their electricity retailer.

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