It's important for you to choose your contract power according to the nature and scope of your operations, so as to minimize your annual electricity costs.

Under the Medium–Power Business Rate (M), contract power is a key component of your agreement with Hydro-Québec. It gives us an idea of how much capacity we must guarantee you in order to meet your demand. Contract power also corresponds to your minimum demand, i.e., the number of kilowatts you must pay for in each billing period.

In winter, Hydro-Québec gives you some leeway by billing you at your current rate for up to 133 1/3% of your contract power. Beyond this level, you have the choice of paying an extra charge – known as an optimization charge – for the excess, or increasing your contact power. If you're not sure which solution is best for your company, talk to one of our representatives.

New measure
As of April 1, 2009, customers who sign a new contract under Rate M are no longer required to specify a contract power. The minimum power they are billed is set at 65% of their maximum power demand wholly in the winter period. From April 1, 2009 to April 1, 2011, the minimum billing demand must not be less than 100 kW.

The power factor (PF) is shown on your bill as "Maximum demand: Real power/apparent power." The rate structure is designed to encourage you to keep this ratio above 90%. A PF below this level causes voltage drops and energy losses on the system, making it necessary to oversize the facilities. By optimizing your PF, you can reduce your electricity bill and extend the service life of your equipment.

The PF is the ratio between real power and apparent power. Apparent power is the power supplied by Hydro-Québec and is expressed in kilovoltamperes (kVA). When you use it, it is broken down into real power (or usable power), expressed in kW, and reactive power, expressed in kvar. Real power is used to operate heat-producing equipment (lights, radiators, etc.), while reactive power results from the creation of magnetic fields used to drive equipment such as motors and compressors.

One of the best ways to manage energy costs is to reduce your maximum power demand to the level needed to meet your simultaneous electricity requirements.

Why? Because maximum power demand is a key factor in determining the amount of power billed to you for a given period.

Real power (kW) and apparent power (kVA) are used to calculate the maximum power demand in kW.

The way your maximum power demand is calculated depends on which of the following two categories you fall into:

Category 1
If your real power demand is never more than 50 kW, your maximum power demand for a given period will be the highest real power recorded.

Category 2
If your real power demand has exceeded 50 kW at least once in the past 12 months, your maximum power demand for a given period will be the higher of the following two values:

• the highest real power demand (kW);

or

• 90% of the highest apparent power demand (kVA).

If you fall into Category 2 and 90% of your highest apparent power demand (kVA) is greater than your highest real power demand (kW) for the period in question, your have two options:

• you can be billed on the basis of 90% of your maximum power demand (kVA) and leave it up to Hydro-Québec to correct the impacts of your low PF on the power system;

or

• be billed based on 90% of your maximum power demand (in kVA) and, in certain cases, pay a charge for a low power factor (PF), leaving it up to Hydro-Québec to correct the impacts of a low PF on the power system.

Careful management of your power demand will lead to substantial savings for your company – another good reason to ask one of our representatives to analyze your situation.

Your company could benefit substantially from an analysis of your load factor (LF). If you improve your LF, the average unit cost (demand and energy) of the kWh you consume will diminish. Depending on your situation, improving your LF could yield substantial savings.

The LF corresponds to the ratio between your actual energy consumption (kWh) and the maximum power available to you during a given billing period, based on your maximum power demand. It enables you to estimate your use of the maximum power demand for the period.

Depending on your needs and load profile, you may be able to improve your LF in one of two ways: