Welcome back! Pick up where you left off.

Confirm your plan and zipcode
Select from 3 of our most popular plans for your zipcode
2 days free per week
100% solar

Reliant Flextra Credits 24 plan

Get your 2 highest-use days a week FREE + $200 in bonus bill credits for extra savings.

Fixed rate
Price protection

Reliant Secure Advantage 24 plan

Straightfoward plan with a locked-in energy charge.

For renters
Popular in your area

Reliant Apartment 12 plan

Designed exclusively for smaller spaces.

Term
2 Months
Rate
Fixed

Pricing Details

USAGE
AVG PRICE / KWH
500 kWh
1,000 kWh
2,000 kWh

Early cancellation fee

Plan Features
Product

Pricing Details

USAGE
AVG PRICE / KWH
500 kWh
1,000 kWh
2,000 kWh

Early cancellation fee

Documents & Legal
Electricity Face Label
Terms of Service
Customer Rights
Prepaid Disclosure
*Average Price per kWh assumes noted usage per month and specific LP&L Delivery Charges (i.e., Residential Service or Residential Distributed Renewable Generation Service). For additional information regarding plan pricing and other terms, please see the Electricity Facts Label, on the Plan Details page. Price shown is for new customers only.
Understanding electricity demand charges Understanding electricity demand charges Understanding electricity demand charges

Understanding electricity demand charges

Understanding electricity demand charges Understanding electricity demand charges

Understanding electricity demand charges

What is an electricity demand charge?

As a business owner, understanding your energy bill is crucial. There are important differences between energy bills for residences and businesses. While homeowners primarily pay for the total amount of electricity used over time (measured in kilowatt-hours or kWh), businesses often face an additional charge called a demand charge. This charge accounts for the maximum amount of electricity your business needs at any single moment, reflecting the strain placed on the electricity grid to meet your peak power requirements. Understanding these differences and how demand charges work is key to effectively managing your business's energy costs.

Woman enjoying coffee using a tablet.

Find affordable electricity plans

Enter your business location to see plans in your area

A business energy bill is made up of 2 key parts:

  • The total amount of energy you use over time
  • How much energy you need at any one time, which is the demand charge

To truly understand demand charges, think of it as less about how much electricity you use over time and more about the maximum rate at which you use it at any given moment. For example, simultaneously powering up HVAC and heavy machinery can create a high demand spike. Utilities collect demand charges to help maintain the infrastructure that handles these instantaneous, peak power needs.

This demand charge is a primary fee from your local Transmission and Distribution Service Provider (TDSP) for delivering electricity. Set by the Public Utility Commission of Texas (PUCT) and detailed in the TDSP’s tariff, Reliant passes this charge directly to you on your bill without markup.

Happy couple using laptop while drinking coffee

Understanding your business energy bill

On your bill, the demand charge is typically part of your Transmission and Distribution Service Provider (TDSP) charges. Your bill will also show your peak demand for the billing period.

Demand: This represents the highest rate of power your business used in any single, short interval (commonly 15 minutes) during the billing cycle.

  • kW (kilowatt): This is the unit of real power, the actual power your equipment uses to do work.
  • kVA (kilovolt-ampere): This is the unit of apparent power, which includes both real and reactive power, representing the total electrical load on the grid. Utilities often use kVA for larger commercial customers.

How electricity demand charges are calculated

Calculating your demand charge is straightforward:

  • Identify your peak demand: Your utility identifies the highest point (your peak demand in kW or kVA) where your business consumed electricity fastest during the billing month
  • Apply the rate: They then multiply this peak demand by their specific demand charge rate (a set price per kW or kVA)
  • Multiply: Your highest "speed" (peak demand) x the price per kW (or kVA) = your demand charge
Reliant Buiness Power Plus 12 plan example bill
Reliant Buiness Power Plus 12 plan example bill
Reliant Buiness Power Plus 12 plan example bill

 

If you’d like to learn more about how your TDSP calculates your demand charge, please visit the rates and tariffs section of the PUCT website.

superior service rep

How to reduce your business electricity demand charges

Effective management of your peak electricity demand can help lower your business's energy costs. Here are some strategies you can utilize to reduce your demand charges:

  • Slow and steady: Don’t turn all your equipment or HVAC units on at once. This causes demand to quickly peak. Instead, power them on in stages to prevent sharp demand spikes that set your billing peak.
  • Upgrade your equipment: Replace outdated machinery with ENERGY STAR certified models. Modern, efficient equipment performs tasks using less power, reducing both overall consumption and peak demand.
  • Downsize: Ensure your equipment is appropriately sized for its task. Overpowered machinery can lead to unnecessarily high demand.
  • Load-shifting strategies: Move energy-intensive tasks, such as large production runs or equipment testing, to off-peak hours when demand is typically lower.
  • Use smart or programmable devices: Install smart controls for HVAC and lighting to automatically adjust settings based on business hours, optimizing usage and reducing demand during unoccupied or critical peak times.  

Frequently asked questions about electricty demand charges

Show all answers

Even if you are no longer using electricity, the TDSP will continue to assess its charges (including demand charges) until your meter is de-energized. Remember, even if you aren’t open to the public or only visit your business location occasionally, any usage for 15 minutes may set a new peak demand that the TDSP uses to calculate your demand charges.

Demand refers to how much energy you need at any single moment in time, while usage is the total amount of energy used over a given amount of time. Your energy charge is based on how much electricity you use during the entire billing period measured in kWh and multiplied by the price per kWh stated in your agreement with Reliant. Your demand charge is calculated using the maximum power your business requires in a 15-minute period measured in kW or kVA.

You can think of it in terms of how a car works: the rate at which you use energy (kw) is comparable to how fast you’re driving (speedometer), and how much total energy you use is similar to how far you drove on your trip (odometer).

Your monthly bill's demand charge is calculated by taking the single highest 15-minute interval of power consumption multiplied by your current per kW rate.

If you have questions about any other line items on your Reliant bill, we encourage you to visit our Understanding your bill page.