hedge (hej) n.: The practice of offsetting the price risk inherent in uncertain markets by counterbalancing one transaction against another.

With hedgePOWER™ you’re provided with a “physical hedge” against volatile peak electricity pricing and demand charge practices. New World sizes an on-site system specifically to meet your base-load requirements during these costly periods. This “physical hedge” against the utility’s most costly energy, results in your paying a lower rate for the power you consume. hedgePOWER™ provides you with a fixed price allowing you to forecast energy budgets with certainty; or a variable price that’s discounted to the utility’s rates.

What is Peak Pricing?

During a typical 24-hour business day, electricity usage by utility customers cycles through periods of high usage (peaks) and low usage. This is where the term “peak” originates. Most businesses peak during mid-day, simultaneously creating a high demand on the utility system. Various methods to store power for use during periods of high demand have been devised. However, electrical energy in the quantity necessary to support the high mid-day demand periods cannot be stored at a practical cost. To avoid potential shortages during high demand periods, utilities build “peaking” units. Peaking units are small power plants that can be brought on line with a minimal amount of lead-time. These units are rather inefficient, and lack the capacity of large power plants. The benefits are that they can be brought on line quickly and can be operated only for as long as needed. Utilities must have this peaking capacity available or suffer from high wholesale spot prices from other generating companies. The alternative is rotating blackouts of their customers to reduce the overall demand on the available power plants.

Protection Against Peak Pricing

Utilities pass along the cost of these additional stand-by peaking units to their customers in the form of On-Peak and Semi-Peak energy rates and costly demand charges. It is possible however, for customers to significantly reduce electric bills by reducing their electricity use during these expensive peak periods.

How are these charges calculated?

The customer pays a higher rate during the peak times, a lesser rate during the semi peak times (evening and early mornings), and a minimum rate at off-peak (night-time hours). Electricity usage is monitored in 15 minute time periods. The highest demand during any one of the 15-minute periods during a 30-day billing cycle will determine the demand charge for the months and the year. The actual demand charge reflects the amount of generating capacity that any individual customer wants his utility to have available for him on demand, whether it is used all the time, or not at all. In other words, you pay the utility for electricity you MAY use. So, the customer with the average or base load of 300kW, who hits a peak of 500kW once in a month, is stuck paying for 500kW worth of power for the entire month. In order to reduce these electric utility bills, the customer needs to reduce and stabilize the amount of power required from the utility during the high cost On-Peak and Semi-Peak periods.

Why pay the utility for energy you don’t use?…….. hedgePOWER™