Houston Churches Pay High Energy Bills With Often Much Lower Kilowatt Hour Usage

by Donny on April 18, 2012

We have spoken to numerous churches in Houston that complain to us that Reliant Energy is really sticking it to them with a very high energy demand charge. As much as I like to agree with customers I can’t always do it and this is most definitely one of those situations where I have to stop the customer and politely educate.

If I wasn’t in the energy business I would most likely be thinking the same thing. The energy demand charges are a cost associated much more with the pole and wire company than Reliant Energy.

Reliant is your retail electric provider and does not control or pass through most of what people refer to as demand charges.You see that demand charge on your bill but that is a Centerpoint Energy charge.

These demand charges are a ratcheted demand fee based on 12 months of electric usage. What I mean here is that the demand charge is not how many kilowatt hours you use but about how high you peaked out the amount of your electricity at any one time in the day or night over the course of the year.

Where kwh is the amount of electricity you use over time, kind of like a trickle from a faucet, demand is the KW or the faucet turned on all the way up or the width of that water coming out of the faucet regardless of the time it is on.

So for instance, a hot summer Sunday a church really cranks up the air conditioner. At this time the church has likely peaked their demand for energy higher than at any other time during the year.

If the church is normally demanding 30 kw but on this hot July they demanded 100 kw than they are now faced with a demand penalty.

The penalty is established by the Public Utility Commission of Texas and interpreted for all Houston electricity accounts in various ways by the pole and wire company which is Centerpoint Energy.

So you really have to complain to the PUCT when you see that on a month that your church may have used zero kilowatt hours of energy you are still left paying a minimum demand charge of something like $300.

You see that church that peaked at 100 kw has set a new peak demand number and must now pay a minimum demand charge on their electric bill each month for the next 11 months. After 11 months the system will look for a new peak number and if your church was striving and paying attention to have a new lower peak demand number you may pay a little less.

As you can see this demand fee on churches is not the most customer friendly charge and even if you change your energy usage habits you still get a huge demand charge for the entire year regardless.

Also, most churches don’t even know that this demand charge is based on the highest peak demand KW number in the last 11 months.

The good news is the TEPA organization, which is a group of energy brokers working together as advocates for local Houston businesses is trying to change the PUCT law on this demand ratcheting penalty.

It appears that the PUCT is listening, the electric utilities are okay with the changes, and things seem to be moving in the direction of making significant changes to how churches are billed for electricity.

If you are a small church that pays way too much money on your electric bill even when you aren’t even using electricity you may find in a year or two that your electric bill is looking a whole lot better. Who do you have to thank? I would thank the TEPA organization as a start. Read more here

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