As the temperature rises in summer, it's time to talk about load management — controlling peak electrical demand through either switching loads off or using on-site generation.

Jackson EMC is billed each month for peak electrical demand based on the average of the five highest hourly electrical demands set during the previous summer. By reducing our peak demand during these hours, we save money through load management. As a cooperative, if we save, you save. To help meet our load management requirements we offer load management rates for commercial and industrial customers. Customers can reduce their electricity costs by actively controlling their peak demand during load management periods. However, like many things in life, there is a risk involved. If a load management customer does not reduce load during load management hours, they pay more.

Let's examine the specifics of the Load Management rate (LMS-5).

The monthly service charge is higher for the LMS rate than the General Service (GS) rate, $150 vs. $22. Therefore, the rate doesn't make sense for customers with low monthly bills. Energy costs are lower on the LMS rate. A customer using 200,000 kWh per month with a 600 kW billing demand will pay 35% less for energy under the LMS rate. However, unlike the GS rate, LMS customers also pay two different demand charges for non-coincident and coincident demand. Monthly peak demand that is not coincident with Jackson EMC's top five hours is billed at $2.00/kW. On the GS rate, controlling the facility's peak demand each month improves load factor, reduces the cost of energy, and saves $2.00 per kW. The larger demand savings comes from reducing demand during our load management hours. With warm weather, as our system peak demand increases, we notify our customers that we are going to operate load management. Because we don't know in advance when our peak demands will occur, we may call for load management as often as 20 days during a typical summer, typically between 3:00 and 8:00 pm. At the end of the year, we determine our five highest hours of demand and calculate the customers' average demand that coincides with our top five hours. This coincident demand is billed at $6.00/kW for each month of the next year. If you are served by the load management rate, the demand you save this summer saves you money for the entire coming year. Load management by the customer is optional. However, if the customer does not reduce demand during the five peak hours, it can cost them $72 per kW next year.

A customer that uses 200,000 kWh per month with a 600 kW peak demand will pay 5% more on LMS than on the GS rate if they do not manage demand. If they do reduce demand during load management hours, the annual cost can be 15% lower than the GS. We also have Large Power Service (LPS) and School Load Management (SLMS) rates that include load management provisions. If you would like to know how load management might affect your bottom line, contact your Jackson EMC C&I representative.