2. Customer billing for electric and natural gas is similar. After the meter has been read the utility company sends out the bill. Both utilities are billed on a per-unit basis. The units are comprised of Kilowatt Hours (KWH). Utility Billing
3. Electric and natural gas rates are calculated on a “declining block rate”. Customers using large quantities end up paying lower per-unit charges. The three elements of the bill are: Billing period: Time period in days that a client is billed. The Meter Readings: There are two readings given, the previous month’s reading and the current month’s reading. The difference is your client’s usage or consumption. Consumption vs Demand: Usage or consumption is measured in Kilowatt Hours(KWH). Kilowatt consumption is simply the measurement of the kilowatts used or metered during a measured period of time/billing period. Demand is the rate at which the electricity is consumed. Rates
4. Consumption and Demand: Example: Ten 100 watt light bulbs are connected to the Acme Power Company meter. Ten 100 watt light bulbs (10x100) = 1,000 Watts or 1 Kilowatt. When the lights are turned on they will each require 100 watts of electricity, and if they are permitted to stay on for one hour, they will consume onekilowatt hour. Since they continued to burn for a 15 minute period / a ratchet interval, a demand of one kilowatt would register on the meter for this period of time.
5. In order to measure the rate of something, there must be a time factor involved. For utility companies, the consumption period is measured by what is referred to as a Demand or Ratchet Interval, which is a predetermined period of time in which demand is registered. Consumption and DemandThe Time Factor
6. Most utility companies base their ratchet interval on a 15 minute time period. When one interval ends, the meter resets and another begins. Demand is recorded during each interval and the maximum demand, Kilowatt Actual (KWA) is registered during a given billing period. Consumption and Demand Ratchet Interval
