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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).<br />Utility Billing<br />
Electric and natural gas rates are calculated on a “declining block rate”. Customers using large quantities end up paying lower per-unit charges. <br />The three elements of the bill are:<br />Billing period: Time period in days that a client is billed.<br />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.<br />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.<br />Rates<br />
Consumption and Demand:<br />Example:<br />Ten 100 watt light bulbs are connected to the Acme Power Company meter.<br />Ten 100 watt light bulbs (10x100) = 1,000 Watts or 1 Kilowatt.<br />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.<br />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.<br />
In order to measure the rate of something, there must be a time factor involved.<br /> For utility companies, the consumption period is measured by what is referred to as a<br />Demand or Ratchet Interval, which is a predetermined period of time in which demand<br /> is registered.<br />Consumption and DemandThe Time Factor<br />
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.<br />Consumption and Demand Ratchet Interval<br />