Understanding Time of Use

Certain times of the year put huge strains on our energy grid due to high demand.  To combat this strain, utilities implement rate increases for specific Time of Use (TOU) periods which increases the cost of energy during these high-demand times.  What does this mean?  Utilities establish higher on-peak and lower off-peak rates for kWh consumed during a specific period – for example, between June 1 and September 30 a utility sets an on-peak rate of $.29 between 3 pm-6 pm and off-peak rate of $.10 for any time outside of the peak period. As a business owner, you want to understand how you are being billed and find ways to manage your energy consumption during on-peak times to keep utility bills as low as possible.

Understanding Your Demand Charges

Your utility will typically identify a period during the month, quarter, or year (varies by utility) where the overall demand on the grid is high and will add a peak demand charge to your bill based off your peak during that selected period. If your peak demand happens to be low during this time you could be in luck, especially if your utility sets demand charges annually.  You will continue to be billed at that rate until the next change cycle. To avoid additional energy, and spend, facility managers must avoid setting new demand peaks by shifting consumption during high-demand times.

For more information on utility charges view our previous blog on understanding electric consumption and demand charges.

5 Ways to Manage Your Energy Charges

Your car today likely tells you how many miles you have until you run out of gas, what the car’s average mpg is, and when it is in need of maintenance. These are fundamental tools to understanding how your car operates and when you need to take action. The same “smart” principles apply to buildings. Below are five ways smart building technology can help manage peak charges and TOU periods, and keep your energy costs in check:

1)  1) Advanced Scheduling: Customers can use advanced scheduling to establish and create a schedule that uses less energy when the rate is high and uses more energy when rates are lower to shift energy loads to lower cost time periods.  Multiple periods can be added to the schedule so the customer is not limited to just setting open-close schedules. Lastly, HVAC schedules can be altered throughout the day to reduce exposure to TOU pricing and create additional savings.

2) Efficiency Algorithms: GridPoint’s setback and recovery algorithms efficiently transition HVAC units, by zone, from unoccupied hours to occupied hours and vice versa.  This limits unnecessary expenditure and ensures that locations are ready for business hours, keeping customers and employees comfortable. Additionally, this reduces a peak energy spike in the morning by staggering the ramp-up period for HVAC units.

3) Load Curtailment: GridPoint’s load curtailment algorithm will predict a building’s peak demand on a daily basis and set thresholds to ensure new peaks are avoided every week.   As demand approaches the threshold automated controls can shut off equipment for short intervals to reduce the load. For example, if a restaurant is approaching peak on a hot summer day, the algorithm could call for various HVAC units to reduce its call for cooling for 15-minute intervals to maintain customer comfort and avoid surpassing the threshold. In order to control comfort within the building, the algorithm will stagger which HVAC units are in “curtailment” mode. Once the load is stabilized below the peak, the unit(s) will resume the normal schedule.

4)  Override Management: Override management features control to what level a setpoint schedule can be altered in a location. This gives employees the ability to make slight changes as needed while staying within company policy to ensure energy efficiency. However, it prevents operational drift from employees creating permanent holds on thermostats that end up wasting energy by running constantly.

5)  Preventative Maintenance: Tools like HVAC Scope and the GridPoint mobile app give managers insight into equipment health and can help identify issues before they occur. Proactively identifying and correcting these issues avoids a costly malfunction that would negatively impact consumption and/or peak charges.


Utilities understand the benefits of smart building technology and energy efficiency tools, and often offer rebates or incentives to customers that invest in efficiency programs and products.  Each building is different and these new technologies can identify and respond to trends or other factors that have an impact on behavior or contribute to unnecessary costs. Click here for more information regarding utility requirements or to see if you are eligible for rebate or incentive programs within your state.


For more information on GridPoint’s smart building technology or anything discussed in this post, contact us.