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Demand Charges: Bad for People, Bad for the Planet, Wrong for Illinois

 

Demand Charges Will Raise Rates and Make Bills Harder To Predict

  • Demand charges allow utilities to set rate they charge consumers for energy on the 15-30 minute “peak use” period when each consumer uses the most power in a given month. This means that bills will be determined on the 15 minute interval you use the most energy, not how much energy you use overall.
  • Because they are based on the highest rate, demand charges will raise rates and bills for almost everyone. At the same time, it will strip consumers of the ability to lower their bills by using less power. Individual home demand is exceedingly difficult for most consumers to track, given that it varies day to day and is only 15-30 minutes long. It will be almost impossible for most consumers to track their peak usage and change their behaviour to be more energy efficient or lower their rates.

Demand Charges Are Unfair and Unjust

  • With demand charges, bills will, on average, be higher. Low-income people already pay an inordinate proportion of their income to the power company. Demand charges would reinforce and worsen this situation.
  • At the same time, low-income folks and people on fixed income can least stomach the sudden month to month rate hikes that individualized, changing demand charges would introduce.
  • Many low-income Illinois residents have to work two or three jobs and only have a couple hours each week to get all their chores done. Under demand charges, the working poor, who would have higher peak uses, and pay higher rates than those who use more, but have the luxury to spread their use out over time.

Demand Charges Would Kill Solar in Illinois

  • Currently solar is economical because ratepayers who put up solar panels can recoup the costs of installation through reduced energy bills (since your overall usage is lower, you get charged less) over time.
  • Under demand charges, the rate you pay will still be based on that 15-30 minute window of peak use, not your overall usage. So putting up solar panels, even selling back to the grid, will not reduce your bill as much. Furthermore, the fact that demand charges mean bills are different month to month means solar panel consumers can’t rely on consistent pay back from the grid.
  • Illinois needs to be expanding both the amount of solar energy we generate and increasing the amount of people who can access it, not adopting rate structures that undermine a core part of the clean energy revolution.

Demand Charges are Un-Democratic

  • Demand charges eliminate the General Assembly’s and Illinois voters’ ability to regulate rate changes in a democratically accountable way and replaces the rate structure with an arbitrary and opaque rate structure that would allow big utility interests to raise rates with impunity.
  • Demand charges hurt poor people, sabotage the development of solar energy in Illinois and hands over control of yet another facet of everyday life to profit-driven corporations. They must be opposed.

This statement by the Nuclear Energy Information Service (NEIS) is endorsed by the Illinois Green Party.