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What Is Peak Demand, and How Does It Affect Me?

When energy is in high demand, small changes can have a big impact.

Simply put, peak demand is when consumer demand for electricity is at its highest. This typically occurs in morning during the winter months, when heating our living quarters, and in the afternoon during the summer months – the hottest part of the day, when air-conditioning is being used. Despite improvements in technology and energy efficiency, peak demand has a significant impact on energy prices.

There are two ways one can address any disparity between supply and demand: increase supply or decrease demand. In the energy market, increasing supply would mean significant infrastructure expenditures like new transmission projects or new regional power generation options in operation for all of New England. Neither are expected to occur anytime soon.

Decreasing the demand for electricity, on the other hand, costs nothing, and small changes can have a big impact when energy is in high demand. In Unitil’s service area, peak demand occurs on the hottest days of the year, between 3 p.m. and 8 p.m. Reducing consumption during peak demand can take many forms. It can be something as simple as turning the air-conditioning thermostat up a couple of degrees or waiting until late evening to run the dishwasher.

Air-conditioning equipment is used in 88% of homes in the United States, at an annual cost of $29 billion to homeowners. (Source:

Unitil recently announced the availability of time-of-use (TOU) billing, which incentivizes customers to shift the bulk of their energy consumption to off-peak times. This program is a departure from the traditional one-size-fits-all approach to billing and gives consumers more control over their electric bills. In exchange for a discount on off-peak energy consumption, time-of-use customers agree to pay a higher rate during the hours of peak demand.

Time-of-use billing is just one way Unitil is working to reduce peak demand, lessening the likelihood of having to purchase electricity on the open market or investing in substantial power plant upgrades. Here are some additional ways consumers can decrease peak demand:

  • Shift the use of large appliances – such as the dishwasher and clothes dryer – to off-peak hours. Many appliances have a delayed start feature that makes this easy to do.
  • Push that air-conditioning thermostat up a couple of degrees. One or two degrees might not seem like much (you may not even notice the difference), but every little bit helps.
  • Avoid using the oven on summer’s hottest days, as this places an even heavier burden on your cooling system. Use the microwave or grill instead.
  • Unplug any unused electronic devices, and consider installing occupancy sensors for lighting.
  • Keep your air-conditioning unit in tip-top shape so it can run at peak efficiency. This includes cleaning or changing filters and keeping exterior equipment free from debris.
  • If you have a pool, adjust when you run the pump to avoid peak hours.
  • A programmable thermostat can minimize heating and cooling costs when you’re away from home and ensure maximum comfort upon your return.
  • Replace aging appliances with ENERGY STAR® models. If your refrigerator is more than 10 years old, that’s a great place to start. As climate change continues to result in extended periods of extreme weather, a proactive approach to energy consumption will help ensure that electricity is available on demand, when it’s needed the most.

Key Takeaways

  • Peak demand is a term used to describe a period of time in which consumer demand for energy is the highest.
  • Reducing the impact of peak demand can be accomplished by increasing the supply of electricity or decreasing the demand for it.
  • Peak demand has a significant impact on energy prices because distribution channels must be capable of delivering electricity at maximum demand levels at all times.