How Does a Demand Meter Work?

Today's question: How does a demand meter work and when is a person required to use one?

Thanks for the question. A demand meter looks very much like the meters that are installed at residential homes. Residential meters measure the amount of electricity consumed by a household, allowing utilities to determine how much that household should be charged for power on any given month. Demand meters are installed for all businesses. As well as measuring the amount of electricity used, these meters also record the peak consumption of power. It's necessary for the utility to have this information, since Yukon business customers are required to pay not only an energy charge but also a demand charge for peak usage.

So the short answer is that if you operate a business, small or large, you are required to have a demand meter for that business.  

Follow-up questions: Is there a separate rate for farms or agriculture? If a demand meter is based on the peak power consumption, does that change from month to month? For a seasonal business that only runs five months a year what would it end up costing the farmer during the other seven months when very little power is used?

If you are receiving an income from your farm, then Yukon Energy considers it to be a business and you are charged the same rate as any other business.

As to the second part of the question, both consumption and demand charges are a part of the power bill for each business customer. The reason businesses must pay a demand charge when residential customers do not is that the consumption and demand for electricity by commercial customers typically varies much more widely than it does for residential customers. Some businesses need large amounts of electricity only rarely, and others need it almost constantly. Even if a particular business only needs a large amount of power for a short amount of time during any given year, the utility must provide the equipment necessary to provide that power. The demand charge essentially pays for that necessary equipment.

In summary, even if a commercial farmer uses power for five months of the year, he or she must pay a demand charge for 12 months of the year.