Energy business term(s) of the day


Basic Facilities Charge
A monthly charge based on costs associated with such things as metering, meter reading, billing, etc. exclusive of demand or energy consumption

Load Factor
The ratio of the average load in kilowatts supplied during a designated period to the peak or maximum load in kilowatts occurring in that period. Amount of electricity the customer uses compared to how much he could have used considering the capacity installed to serve.

Load Factor Rates
This rate design spreads the fixed costs over the energy charges based on load factor. With this design, improvement in load factor automatically results in a lower per unit cost, i.e. customers can reduce their average cost per kWh by reducing their demand. G, GA and I are load factor rates (see also, Declining Block Rates).