We are changing our rate structures to better align with the cost to provide you with electricity during periods of high demand.
These new time-of-day rates, referred to as Energy Wise rates, can help reduce the need to build additional sources of electric generation, such as power plants. They are the standard rate for all customers starting October 2025.
Demand charges
For some business accounts, the new electric rates will also include a demand charge, which is measured in kilowatts (kW). This applies to accounts with 15-minute demands greater than 10kW.
A demand charge is displayed as a separate line item on your bill. It is your peak demand multiplied by a charge per kilowatt and number of days in the billing period. For some rates, demand may be adjusted based on power factor and/or peak demand over the last 12 months.
What are kW and kWh?
kW stands for kilowatt and is a unit of power, while kWh stands for kilowatt-hour and is a unit of energy. Power is the rate at which energy is used, while energy is the amount of power used over a period of time.
Think of it this way: kW is like the speedometer on a car measuring how fast the car is moving, while the kilowatt-hour is like the odometer, measuring the total distance the car has traveled.
Your business will have many different devices using electricity at the same time, with some turning on and some off during the 15-minute period.
Why is Colorado Springs Utilities adding an electric demand charge?
Demand charges are not new, but we’re breaking them out of the fixed costs in a separate line item so that you can see when you’re using the most power and how to manage it.
Demand charges better align the cost of providing reliable electric service and the fixed cost of maintaining infrastructure. Customers with a higher demand require higher fixed costs to serve than those with lower demand.
You can relate this to a vehicle's engine. Smaller, less expensive engines are only capable of reaching certain speeds. If you require higher speeds, you must purchase an engine that can accommodate that demand, even if you don’t always need it.
When you have a higher demand, that causes additional stress on the system and has a bigger impact on maintenance costs and more.
How can I minimize demand charges?
One way to reduce peak demand is to install more efficient equipment, stagger the use of equipment to eliminate spikes in demand, or reduce the number of devices that you operate at the same time.
- Start planning to replace any equipment nearing the end of life. This will give you time to shop for the best price on high-efficiency models.
- Be sure to contact us before purchasing to see if efficiency rebates are available.
Check out the Energy Wise tips for small business for additional ways to save.
