Frequently Asked Questions - Business
Q. I see an energy charge, demand charge and a fuel charge on my bill. Why
are you triple charging me for electricity?
A. On a non-residential
account your electric service is divided into three components, a demand
charge, an energy charge and a fuel charge. The demand charge reflects the
maximum requirement for electricity as measured in 15 or 30 minute intervals
(depending on the Entergy company providing your service). This can be likened
to installing a water pipe to your home. The wider the pipe the more water is
capable of being delivered (i.e., capacity). That is what your demand charge
measures, your maximum delivery of kilowatts during a 15 or 30-minute interval.
Your energy charge reflects how many kilowatt hours you consumed during the
entire billing period. It would be likened to how much water passed through
your pipe for the billing period. The energy charge is determined by the
number of kilowatt hours you consumed multiplied by an energy charge per kWh.
The charge represents the non-fuel cost to produce these kilowatt hours (i.e.
cost of generating plants and power lines).
Finally, the fuel charge is merely a pass through cost for any purchased power
and the fuel needed to generate the required energy output. There is no markup
on fuel. Entergy charges what it pays for the fuel and purchased power
necessary to meet your energy requirements.
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Q. How do you determine the demand charge?
A. Entergy Arkansas,
Inc. employs a specialized meter that records kilowatt demand in 15 minute
increments which allows us to determine the highest kilowatt used in a billing
period. The length of your billing period varies depending on the jurisdiction
serving your account. The period’s peak demand (kilowatt) is multiplied by a
demand charge to arrive at your demand charge amount. See Tariffs.
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Q. My business is closing part of our operations and we have reduced
operations by three-quarters over the last four months. Yet my electric bill,
especially the demand charge, remains nearly the same as before we reduced
operations. What is wrong here?
A. There are many variables that
contribute to your energy consumption. Although you closed most of your
operations, have all your machines, pumps, heating and cooling systems,
lighting, computer operations been fully curtailed as well? Also, many tariffs
allow recovery of capacity provision expense (i.e., providing you the maximum
amount of electricity capacity that you require) over an annual period. Hence,
your demand charge may be established on a previous peak and this peak demand
will remain in effect through out the recovery period (in most cases a year).
You should avoid establishing a new peak demand during this transition period.
Doing so will help reduce your monthly bill sooner.
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What is Summary (Collective) Billing?
A. Summary (Collective)
Billing is a service for businesses that have three or more operations (e.g.,
manufacturing or assembly plants, stores, distribution centers, schools, etc.)
within a specific Entergy operating company, like Entergy Arkansas, Inc. The
business customer’s electric bills are collectively rolled up to and presented
once a month as a master bill that contains each individual account’s details.
To remain a collective billing customer the business must pay their bill by
the due dates indicated on the master bill.
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