It’s not just how much electricity you use — it’s when you use it. That idea is at the heart of this month’s topic: the Demand Charge.

Demand-related costs make up a significant portion of what Pioneer Electric pays for wholesale electricity — costs that are then shared by all members.

What is demand?
Demand refers to the highest level of electricity your home or business requires at one time. It’s measured in kilovolt-amperes (kVA), and it captures the peak level of usage during your billing cycle — not the total.

Imagine this: You run your heater, electric oven, clothes dryer and water heater all at once. That moment creates a spike in demand. Even if you use a moderate amount of electricity overall, that short burst of high use affects the load on the system.

Why does it matter?
The electric grid must generate and deliver electricity in real time. There’s no large-scale way to store it. 

Power suppliers must be ready to meet those spikes instantly, which means building and maintaining infrastructure to serve the highest peak — even if it only happens for a few minutes a year. 

The Demand Charge ensures that members who place the greatest burden on the grid at peak times contribute fairly to the costs associated with maintaining that capacity.

How demand charges appear on your bill
All Pioneer Electric residential members pay a $1 per kVA demand charge. However, according to our 2025 cost of service study, the demand charge for residential members should be closer to $9 per kVA to fully reflect the cost of power we purchase from PowerSouth. In other words, we’re paying more in wholesale demand charges than we recover from our current rate structure.

This imbalance means we must recover those costs from other charges, such as the Energy Charge. Our goal is to better align our expenses with our revenue sources.

Can I reduce my demand?
Yes — by spreading out your usage instead of stacking it. You can reduce demand by running large appliances (heating system, oven, washer, dryer, dishwasher) at different times.

The goal isn’t just to use less total electricity — it’s to use it more evenly throughout the day.

What’s next?
In the final article of this series, we’ll talk about the future — and why Pioneer Electric is taking a thoughtful, data-driven approach to ensuring our rates better reflect the actual costs of providing reliable, affordable power to members.