Your commercial electricity bill has two numbers on it, and most building owners have only ever looked at one of them. The first is consumption — the kilowatt-hours you used over the month. The second is demand — the highest rate at which you drew electricity during any single 15-minute window. In much of Alberta, the demand charge routinely runs higher than the energy charge itself, and unlike consumption, it can be driven by a single bad quarter-hour that then follows you for a full year.
If your building sits in FortisAlberta or ATCO Electric territory — or in a large-commercial rate class with ENMAX or EPCOR — this is almost certainly on your bill. Here’s how it works, why it’s so easy to get wrong, and what actually reduces it.
Demand is flow rate, not volume
Consumption and demand measure two different things. Consumption (kWh) is how much energy you used in total. Demand (kW or kVA) is how fast you used it at your worst moment.
FortisAlberta’s own customer education material uses a filling-a-bucket analogy: a garden hose at one gallon per minute fills a five-gallon bucket in five minutes. A high-flow faucet at five gallons per minute fills the same bucket in one. Same total volume, very different flow rate. The utility has to build and maintain pipes, transformers, and substations for the worst case, not the average, and the demand charge is what pays for that capacity.
Demand is measured on a rolling 15-minute window. Your meter watches the average kilowatts drawn across each interval, and the highest interval in the billing period becomes your billing demand. If you hit 95 kW for fourteen minutes and then drop, nothing happens. If you hold 80 kW for the full fifteen, that’s the number that goes on your bill.
The ratchet: one bad quarter-hour can cost you all year
Here’s the part most building owners miss. FortisAlberta and ATCO Electric don’t just bill you on this month’s peak — they apply a ratchet. Your billing demand is the greater of:
- Your highest metered demand in the current billing period,
- 85% of your highest metered demand in the past 12 months, or
- A rate-class minimum.
Work through what that means. Suppose your building normally runs at around 60 kW. On one hot afternoon in August, three rooftop units, a chiller, and a large compressor all happen to be running in the same 15-minute window, and your meter registers 100 kW. That 100 kW doesn’t just drive August’s bill. It sets a floor of 85 kW for the next eleven months. Even if the building never comes close to that load again, you’ll keep paying for 85 kW of capacity all the way through next summer.
A single bad quarter-hour can quietly add tens of thousands of dollars to your annual electricity cost — and nothing in your monthly bill tells you what caused it.
Who pays demand charges in Alberta
Distribution companies set their own tariffs, so whether and how you pay depends on where your building sits:
- FortisAlberta — delivers electricity to roughly 60% of the province’s distribution network, covering most of central and southern Alberta outside Calgary and Edmonton. Demand charges apply to every commercial rate class above the smallest service threshold.
- ATCO Electric — covers most of northern and east-central Alberta. Commercial and industrial customers pay demand charges.
- ENMAX (Calgary) and EPCOR (Edmonton) — small-business customers don’t see a demand line item, but once the service crosses into the larger commercial rate classes, demand charges apply here too.
If your building is a warehouse, school, multi-tenant office, grocery store, industrial site, or anything with a service larger than a typical retail bay, demand is almost certainly on your bill — whether it’s broken out as its own line or bundled into a capacity-based delivery charge.
Where the spikes actually come from
Demand peaks aren’t usually the result of one oversized piece of equipment running hard. They’re the result of coincidence — several things ramping in the same 15-minute window. In a typical commercial building, the usual culprits are:
- Morning warm-up. Every rooftop unit, every boiler, every pump coming out of setback at 6:00 a.m. at the same time. The worst demand hour of the day is often the first hour, before anyone has arrived.
- Simultaneous heating and cooling. In shoulder season, one zone calls for heat while another calls for cooling and both systems run flat out. Double the load, no extra comfort.
- Electric resistance backup. Heat-pump defrost cycles and backup strip heaters can cut in during the coldest 15 minutes of the morning — exactly when the rest of the building is already at peak draw.
- Uncommissioned reset logic. Supply-air reset, economizer changeover, and chilled-water reset schedules that were never properly tuned leave equipment running at full output when partial would be fine.
- Stacked motor starts. Elevators, domestic hot water recirculation, makeup air units, and chiller compressors that all happen to start within the same quarter-hour.
Individually, none of these are dramatic. Stacked in the same 15-minute window, they set your bill for the next year.
Why your bill and your BMS can’t find it
The utility bill gives you a single demand number for the month. That’s it — no day, no hour, no cause. By the time you see it, the damage is locked in, and any attempt to diagnose it has to rely on guessing which equipment happened to run together.
A building automation system fills in part of the picture, but not the part that matters here. As we covered in a previous post on energy monitoring, a BMS tracks what equipment is doing — setpoints, runtime, damper positions — not what the whole building is actually pulling in aggregate kilowatts. A BMS can tell you the chiller was on. It can’t tell you that the chiller, two rooftop units, and the domestic hot water recirculation all happened to start within the same twelve minutes.
To see demand properly, you need interval-level sub-metering: current transformers on the main service and each major branch panel, logging at 15-minute resolution or faster. Then the peaks show up as clear spikes on a dashboard, with the contributing circuits broken out so you can see exactly what stacked on what.
What actually flattens the peak
Once you can see the profile, the fixes are usually unglamorous and cheap compared to what they save:
- Stagger morning start-up. Bring rooftop units online in sequence rather than simultaneously. Five minutes of offset across four units can drop morning demand by 20% or more with no comfort impact.
- Pre-condition before the occupancy window. Ramp setpoints gradually in the hour before the building fills, rather than hitting full load at 8:00 a.m. sharp.
- Sequence electric resistance loads. Never let heat-pump defrost, backup strip heat, and domestic hot water recovery all run in the same 15-minute window.
- Commission reset schedules. Supply-air reset, condenser-water reset, and economizer logic that actually run as designed can hold demand well below what an always-full-output system draws.
- Enable demand-limiting in the BMS. Many modern controllers support a soft demand cap that sheds or delays non-critical loads when a threshold is approached. On most buildings it’s disabled or was never configured.
Peer-reviewed work on commercial peak-load management routinely reports 20% to 30% reductions in the demand portion of the bill through scheduling and controls alone — no new capital equipment required.
And it matters more as benchmarking arrives
Edmonton’s voluntary Building Energy Benchmarking Program is on track to become mandatory, and while benchmarking is reported on consumption, demand is where much of the fixable money hides. Buildings that can already see their 15-minute profile will move straight from a benchmarking score to a targeted action list. Buildings that can’t will need to stand up monitoring infrastructure first — and then wait a full season to gather the data before they can act.
The bottom line
Demand is the part of your electricity bill that has nothing to do with how much electricity you used and everything to do with how badly your equipment happened to coincide. In Alberta, a single uncontrolled 15-minute window can set a floor on your bill for the next twelve. And unless you can see the building at 15-minute resolution, you can’t tell what caused it — let alone prevent the next one.
CK Building Analytics designs and installs custom energy monitoring systems for commercial buildings across Alberta, with the sub-metering and dashboards needed to see demand peaks as they happen and trace them back to the equipment driving them. If your power bill has a demand line you’ve never fully understood, get in touch — we’ll help you start seeing where it comes from.