Phoenix Energy Blog
Choose the best energy supply option for your business in New York

What is Peak Demand and How to Reduce it


When you are paying your electricity bill, you probably notice that your rate varies month-to-month? Maybe you opened a restaurant a couple months ago and you’ve been noticing the rate going from extremely high and reducing every month. How can that be?

No your energy company (probably) isn’t ripping you off. This fluctuation can be explained by peak demand. But, what is peak demand? And, can you do anything to reduce those charges? Let’s take a look.

What is peak demand?


While electricity rates are dependent on many factors, one is the amount of electricity consumption and when. Peak demand is the highest amount of energy used during a 15 to 30 minute period of time during the month, and determines a large part of how your rate per-month is established.


Imagine it this way: you turn your lights on and off normally throughout the day and have no other appliances or electricity flowing through your home. One day, however, you have a party and power a sound system, refrigerator, and electric oven all at the same time. 


Con Edison didn’t plan on you using as much energy as you had, so there was a strain on the transmission lines. To avoid that strain next month, Con Edison will be better-prepared with that energy for you even if you go back to using much less all next month. If you don’t throw another party, your peak demand will level out again and reflect in your rates. So, you’re essentially paying for the kilowatt hours (KWH) used during a short period of time, as it creates an unplanned burden on the electrical grid.


The question, then, is how does one level out their usage? Can you do anything to prevent this, or are you stuck paying exorbitant bills whenever you host a party or turn on a bunch of lights?

Peak demand reduction

There are numerous ways you can reduce peak demand,  from occupancy sensors in all rooms, to unplugging unused electronics. To help you cut down on your peak demand usage and reduce your overall energy use, here are a few strategies and tools you can use to save money ASAP:


Identify your peak usage times


If you can identify when you are using the most power each day, you can find ways to lessen the blow to your transmission wires. “Load-Shedding” is the industry term for shaving off your peaks of highest kW usage. 


There are many forms of technology that best help monitoring a building's energy usage. An energy management system (EMS) will provide the most insight into your load profile and will ensure equipment will not simultaneously peak producing a strain.

                                                                                                Energy Efficiency NYC                                                                                                 

Utilize a generator

A smart solution being employed across many industries is using a generator. During peak load hours, by taking the entire or partial kW off of the traditional electricity source and supplement with a generator, you can greatly reduce your spikes and reduce demand charges by as much as 30%.

Install motion-activated lights

While motion-activated lights won’t necessarily reduce your peak demand charge, they will help you reduce your overall power demand and utility bill.


Motion-activated lights ensure you’re using energy efficiently, as lights will turn off when you’re no longer in a room for a set period of time.

Use a renewable energy source

Lowering you overall electricity demand and energy consumption can help reduce your peak usage and overall utility bill. But, renewable energy can help you in an even bigger way.


Using renewable energy can allow you to cut down on your utility bill, reduce your carbon footprint, and help your company image as well. While renewable energy entailed getting your own solar panels or wind turbines in the past, you can now use renewable energy vendors. This makes renewable energy more accessible than ever before.


To see how much your business can save by switching to a clean energy plan, schedule a free consultation with Phoenix Energy today.

Taking ownership of your electric bill

Utility bills can be messy, complicated, and downright confusing. With the right knowledge you can better-understand peak demand. While this is only one component of your bill, it’s a big component that can result in costly energy use and frustration.

Make cuts to your energy usage where you can, consider switching to renewable energy, and take complete ownership of your electric bill. When you’re ready, consider securing renewable energy in NYC. Your bill, business, and the planet will all thank you.

You May Also Like

Most Popular

image work

A Better Way to Do Business

Read more
Comment: Have something to say? Leave your comment here