Each charge on the electric bill covers different costs associated with providing electrical service to the Membership.
Energy charge – A variable charge to cover the cost of energy used in the billing period, measured in kilowatt hours (kWh). It is intended to cover the costs of purchasing power from our wholesale power and transmission provider.
Base charge – A flat fee to cover the fixed costs of operating the utility. Examples include the office building, billing and metering systems and equipment, office personnel, taxes, and debt service.
Demand charge – A variable charge based on the highest rate of electric use during the billing period, measured in kilowatts (kW). It covers the costs of maintaining the distribution system, including poles, wires, substations, trucks, and line crews.
Yes. As of January 2025 the date of your demand reading is listed on page 2 of your monthly statement. We are working with our billing software provider to add the time of the demand reading to the bills as soon as possible.
The demand charge is calculated based on the average peak demand usage during any fifteen-minute interval within a billing period. Spreading out activities that require a lot of energy throughout the day instead of doing them all at once will help reduce your average peak demand, which will lower your demand charge on your electric bill. The goal is to level out your load. For example:
Operate your electric stove, oven, washing machine, clothes dryer, dishwasher, car charger and other large appliances at different time intervals throughout the day, and not all at once. You could start your washer or dryer after cooking, and try not to run your washer and dryer at the same time.
Turn off non-essential lights and appliances when not in-use.
When possible, adjust your thermostat to reduce heating and cooling.
The impact of separating out the demand charge from the energy charge will vary from Member to Member. Some Members will see no changes, some will see an increase in their bill, while others will see a decrease. This will all depend on their demand and energy consumption, or in other words, how much energy they use each month and their usage habits will affect their bill amount. The impact can also fluctuate from month to month based on these factors.
The Rate Calculator found in the first section of this Rates page will allow Members to view recent months to compare current bills to the future rate design through 2028. This calculator will be updated with monthly data as we move through 2025.
With the current rate structure, Members who use more energy generally pay disproportionately more for the demand charge than Members who consume less energy. This is because the demand charge is embedded into the energy rates. Therefore, when their energy consumption increases, the demand charge automatically increases, whether or not the Member has a high demand usage.
On the other hand, Members who have lower energy consumption generally pay less for the demand charge because it is built into the energy rates, even if their demand use is high. In effect, they are paying less than their fair share for using the OCEC system.
The new rate structure is designed to be more transparent and equitable. The goal is to ensure that all Members are paying their fair share of using the OCEC system, and that OCEC has a way to assign costs that are directly related to demand use, and not based exclusively on total energy consumption.
OCEC has charged demand to Members in the G3 and G4 rate classes since our last rate design change over ten years ago.
Starting in 2025, prior to demand charge implementation, G1 and G2 Members’ bill will include a line item showing peak demand for the month but with a zero charge for demand. Members will have the ability to view their monthly peak demand and modify their usage, if they so choose, before the charge is implemented. This will allow them to see how modifying their usage might impact their demand and the demand charge.
Beginning in 2026 OCEC plans to charge demand to G1 and G2 rate classes with the following amount and schedule:
January 1, 2026 – $0.25/kW demand rate
January 1, 2027 – $1.00/kW demand rate
January 1, 2028 – $2.50/kW demand rate
Each demand rate increase will be accompanied by an energy rate decrease. Please see the table following this FAQ for a full listing of the proposed base, energy, and demand rates for G1 and G2 rate classes through 2028.
Generally, every 2 to 3 years, OCEC performs a Cost of Service Analysis (COSA) which calculates the total revenues required by OCEC to meet its planned expenses. The COSA also calculates the cost to serve each rate class to determine how much revenue each class should contribute to the total. The COSA recommends to the OCEC Board of Directors what the demand rate should be. Through the rate review process, the Board then sets the rates for our Members.
The demand charge enables OCEC to recover the costs of maintaining the distribution system.
A Member who uses a high demand requires more services from OCEC, including additional capacity, which means a higher expense for lines, transformers, substation equipment, etc. OCEC uses the demand reading to determine the maximum energy (or maximum capacity) required by our Members.
This information is used to develop a system that is able to meet the Member’s highest peak demand. Members may not be using the OCEC system at maximum capacity all the time. However, OCEC is still required to maintain the system so that it is ready to provide service to Members at maximum capacity, at any time of the day.
