What Kind of Energy User Are You?

Consumers are more energy-conscious and aware today than they have ever been in the past.   If you’re one of those energy-savvy-conscious consumers, you’ll want to know more about the load factor associated with your home or business and what it has to do with how efficiently you use energy.

Keep reading and the next time you see load factor figures on your utility bill you’ll know exactly how they were calculating and what they mean.

What is the Load Factor?

The load factor is an indicator that gives you an idea of what kind of energy consumer you are and of how efficiently energy is being utilized. It’s the actual amount of energy (kilowatt-hours – kWh) delivered in a designated period of time, as opposed to the total possible energy (kWh) that could be delivered in that same designated period of time. A high load factor indicates that load is using the electric system more efficiently, whereas consumers that underutilize the electric distribution will have a low load factor.

Why Does Load Factor Matter?

Electric utilities must provide power to everyone within their service area and they have to be prepared to supply it even if in the event that everyone is using the maximum amount needed (peak load) at any given point in time.  In other words, the utility might not need to actually supply that maximum power amount, but they have to have the capacity to do so.  Power is expensive during peak periods if they do have to provide electricity at those peak times, it can be expensive.  It’s simple supply and demand.

Power is expensive during peak periods. Customers who use electricity in a way that reduces or smoothes out those peaks help put less strain on the power infrastructure. That translates to the possibility of lower rates for those customers.  

How to Calculate Load Factor

Everything you need to calculate load factor can be found by looking at your electricity bill. The load factor is calculated using a few numbers from the electric bill:

  • Actual kilowatt-hours used during the billing period, in KWH.
  • The Peak kilowatt demand, in KW
  • The number of days in the billing period:

(Average Load ÷ Peak Demand Load)/number of days in the billing period = Load Factor

The value of the Load factor will always be less than one.   A lower number means that your general energy demand is far away from what your peak demand is and meaning that you could be more efficient in your energy consumption.   The closer you get to 1 (or 100%), means that you have fewer peaks in the way you consume energy and are more efficient in the way you consume electrical energy.

How to Improve Load Factor

The higher the load factor the better, but how do you get it closer to the 1 mark? Improving load factor is primarily about controlling peak demand. Lowering the peak demand will automatically help to increase the load factor percentage.

One way you can do this is by shifting some of your energy usages away from peak times.  For example, you may want to shift your washing and drying of clothing to the late evening. Or, Aa programmable thermostat could help you by increasing your thermostat setting throughout the day when peak demand is high and then reducing it in the early evening. You’ll be relieving the electric grid and your wallet at the same time.

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