Electric Demand Charge

Demand Charge = The highest average kW measured in half-hour intervals during the billing period. Demand measures a member’s individual impact on the grid. Two members can use the same amount of energy (kWh) in a billing period but their demand (kW) can vary drastically. Running things such as appliances separately rather than simultaneously helps reduce your demand.

Demand Calculator

Want to see how demand usage impacts your electric bill? Click on the button below to see how much kW various appliances use.

Calculate Your Demand Usage

Understanding Demand Rate: Spread, Don't Stack

FAQs to be updated

Basic Service Charge:

This fee helps pay for the electrical infrastructure (poles, wires, transformers, substations, etc.) that is required to get power to your home or business. It also helps pay for the maintenance of that equipment. There is a fixed cost for the infrastructure regardless of how much electricity you use (even if you use 0 kWh there is a fixed cost to have the service at your location). The average investment per account is approximately $12,500 plus ongoing maintenance costs.

Energy Charge:

This fee pays for the actual electricity (including power supply) that members use to power their homes and businesses. The energy charge is measured is kilo-watt hours (kWh).

Demand Charge:

Currently only large power users have a demand charge on their power bill. This fee pays for the rate at which you are using electricity during a 15- or 30-minute period of highest power use throughout the month. Demand is measured in kilo-watts (kW). In other words, it’s the amount of power required in an instant to satisfy the needs of all your connected equipment, lighting, etc. and anything else in your business requiring electricity at the exact same time. Residential and Rural Residential members have demand listed on their electric bills to help them monitor their individual demand impact on the electric system.

In other words, it’s the amount of power required in an instant to satisfy the needs of all your connected equipment, lighting, etc. and anything else in your business requiring electricity at the exact same time. Residential and Rural Residential members have demand listed on their electric bills to help them monitor their individual demand impact on the electric system. Demand may be charged in the future for Residential, Rural Residential, and General Service members to more accurately reflect power supply costs.

An easy way to think of energy and demand is through a water bucket analogy (see below). In this example, demand represents the speed of the water flow at any single moment in time and energy corresponds to the total amount of water that ends up in the bucket.

Sioux Valley Energy studies and reviews its rates thoroughly each year through a multi-step process, based on revenue requirements. This work includes a cost-of-service study conducted by an outside engineering firm, a review/analysis by an internal SVE rate committee, and review by the cooperative’s Strategic Leadership Team. The rate development process looks like this:

No. The needed rate increase from our power suppliers does not factor in any generation or transmission for hyperscale data centers. Basin Electric Power Cooperative has a separate Large Load Program that is designed specifically to address the generation and transmission needs of data/AI centers ensuring they pay their own way without harming the cooperative’s “legacy” (Rural and Urban Residential, Commercial, etc.) members.

Each utility has its own method of recovering the cost of providing electricity to its customers. According to the US Energy Information Administration (EIA) the 2025 year to date average cost for electricity in the U.S. was 17.10 cents/kWh. With the increase, SVE’s average Residential rate (including Basic Service Charge) is 12.81 cents/kWh. Electric Power Monthly - U.S. Energy Information Administration (EIA). Many area utilities are increasing rates in 2026.

The Cooperative is a not-for-profit electric utility. Our business model focuses on setting rates based on actual costs – profit is not the focus. In fact, any margin that is realized by the Cooperative is given back to the members in the form of capital credits. We are, however, required by lenders to maintain minimum financial benchmarks.

To minimize the need for a rate increase, we reviewed all expenses. The Cooperative decreased direct expenses in 2025 and are budgeting a decrease again in 2026. The result is a total reduction in direct expenses of approximately $300,000 since 2025.

However, because direct expenses only make up 6% of the budget, the impact of that is minimal. The driving force behind the rate adjustment is power supply costs (over 60% of the budget), which are not controllable expenses. Direct expenses include day-to-day activities such as cable locating, right-of-way clearing, pole testing, member billing and postage, member meetings, community development, software, director expenses, building expenses, dues, and outside services. See how SVE member’s dollars are spent: