M&M Systems has developed a suite of energy savings tools to reduce power usage without sacrificing
temperature control or facility safety that assists in providing a rapid return on your investment.
Our control systems have been shown to provide energy savings up to 25% compared to
electro–mechanical controls and simple PLC systems. By utilizing optional energy management
suite features, a properly tuned M&M control system has been able to save an additional 10%.
Cost of Energy and Demand Charges
The first step in reducing your facilities energy usage is understanding how your bill is calculated
from your energy provider. To understand more about demand charges and kW usage examples go to the
Cost of Energy page.
Energy Management Control Tools
M&M Systems offers many control features to assist in lowering and monitoring energy usage while
maintaining necessary operational temperatures. To learn more about these features go to the
Energy Management Tools page.
What is Demand?
Demand is the total amount of electricity being used by a consumer at any one time. It is measured in
kilowatts (kW). Customers are billed according to kW of demand for their rate. The kilowatt (kW) and
the kilowatt–hour (kWh) are the basic units of electricity. Your meter measures these units, and
your energy provider uses them to determine your monthly bill.
What is Demand Charge?
Demand charge is based on each customer’s maximum 15 or 30 minute demand on the energy providers
distribution system each billing period. Demand is measured in kilowatts (kW). Customers are billed
according to kW of demand for their rate. Demand charge may be a fixed charge per kilowatt, or divided
into rate brackets: the highest charge on the first bracket, and lesser charges on the following brackets.
Why are Demand Charges Used?
Demand charges are the way your energy provider pays for generation and distribution capacity it needs
to meet peak demand that occurs from time to time.
Demand Charge Examples:
Running a 20 kW load for one hour would result in usage of 20 kilowatt hours (kWh) and accrue a demand charge
of 20 kW
20 kW x 1 hour = 20 kWh
Demand = 20 kW
Running a 2 kW load for 10 hours would also result in usage of 20 kWh but would only accrue a demand of 2 kW
2 kW x 10 hours = 20 kWh
Demand = 2 kW
Both examples use the exact same amount of energy (20 kWh) and perform the same amount of work. However, the
resulting bill will be very different. Applying a power rate demand charge of $8.80 per kW and an energy
charge of 5.4 cents per kWh to both examples produces the following results:
20 kW x $8.80 = $176.00
20 kWh x .054 = $1.08
Total = $177.08
2 kW x $8.80= $17.60
20 kWh x .054 = 1.08
Total = $18.68
Since you are billed for both demand and energy, keeping both components to a minimum will help lower your