Lake Region Electric Cooperative
Beginning with the May 2020 irrigation statement, the method for billing the monthly Demand Charge will change. Going forward, it will be based on the actual metered power, measured in kilowatts (kW), used by the irrigation system. In the past, the demand charge was based on the nameplate horsepower (HP) rating of the electric pump motor. There will be no change in the Facility Charge or Energy Rate (kWh).
Using actual measured electric kW demand provides for an accurate method of ensuring that wholesale power costs and local distribution capacity costs are fairly allocated to individual irrigation services. In addition, kW and kWh are measurements used by the electric industry and our power supplier, GRE, to price power and energy delivered to LREC.
The new kW demand rate is designed to bring in the same amount of total revenue as the HP method, in other words, the change will be revenue neutral for the irrigation rate class. However, since demand billing will be based on actual measurement, some accounts will see higher bills, some lower but most will experience little change.
One benefit of the change in demand billing methodology was noted by some irrigators last season. May and September 2019 were very wet and irrigation wasn’t necessary on many fields. Yet, many irrigators were billed for nameplate HP demand even though they hadn’t started their pumps. Under the same situation and new methodology, the metered demand would be zero or just the kW required to move the pivot.
FAQs
How will the change affect my bill? We will send a letter to all members with irrigation accounts and provide them with the metered kW demand from the 2019 season to provide a comparison of kW versus HP demand costs. The comparison may indicate some months where the kW demand costs will be lower than the HP charge and other months the reverse, but overall irrigation season costs will not change much for most accounts.
Why is this rate change necessary? Electric power or demand is billed per kW by the wholesale electric market. Our meter technology allows us to accurately measure the kW demand of individual irrigation systems and allocate electric power and distribution costs according to actual usage.
What is demand? Demand, represented by kilowatts (kW), measures the rate at which energy is used at a point in time. Billing demand is the average kW supplied during the 15-minute period of maximum use during the monthly billing period.