Demand costs can account for as much, and sometimes more, than half of a commercial electric bill. The costs are based on infrastructure charges a utility must charge to recover costs it may not recover under a purely volumetric throughput charge. Demand costs have traditionally been an unavoidable expense.
Now there are programs that can mitigate this expense through close management of usage during critical time periods. Utilities may signal demand requests to their customers in a variety of ways.
Demand programs are a technology-enabled economic rationing system for electric power supply. In demand response, voluntary rationing is accomplished by price incentives—offering lower net unit pricing in exchange for reduced power consumption in peak periods. There are many lucrative programs in most states. A no-cost evaluation of your electric costs can determine potential available savings.