UNDERSTANDING YOUR ELECTRIC BILL

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UNDERSTANDING YOUR ELECTRIC BILL

A GUIDE FOR BUSINESSES IN NORTh CAROLINA

Duke Energy

550 South Tryon Street Charlotte, NC 28202 www.duke-energy.com

120633 | 10/12

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Many businesses have found they can lower their electric bills without impacting their operations. You may be able to reduce your energy costs by revising operating schedules, replacing inefficient equipment or selecting a different rate schedule. You can also take advantage of our energy efficiency and demand response programs:

• Smart $aver®_{Incentives help you lower the initial costs of purchasing energy efficient}

equipment – to help control your operating costs and improve your bottom line. • Our PowerShare®_{demand response program rewards your business for curtailing your}

energy usage during periods of peak demand.

• Energy Assessments can help you find ways to save energy, implement energy-saving opportunities and reduce operating costs.

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ELECTRIC ENERGY AND DEMAND

Duke Energy measures electricity usage in two ways. The first measure is energy – which is the quantity of electricity used, measured in kilowatt-hours (kWh), like that shown on your billing statement at home. The second measure is demand – which is the rate of energy usage, measured in kilowatts (kW). The key to under-standing your utility bill is to remember the difference between electric energy and demand.

It may help to use the analogy of the odometer and speedometer in a car. The amount of energy used (kilowatt-hours) can be compared to miles driven, as shown on the odometer. Energy demand (kilowatts) is more like the speed or the rate at which the miles are driven, as shown on the speedometer.

ExamplE:

When you turn on an electric appliance, you create demand for power. This instantaneous amount of electricity demanded is measured in watts. A 100-watt light bulb, for example, demands 100 watts of electricity when it is energized. Ten 100-watt light bulbs would demand 1,000 watts (10 x 100 = 1,000) or 1 kilowatt (kW). So kilowatts measure the rate at which electricity is used.

If this same one-kilowatt load is operated for one hour, one kilowatt-hour (kWh) of electricity is used (1 kilowatt x 1 hour = 1 kilowatt-hour.) The kilowatt-hour is the most common unit for measuring electrical energy usage.

¡ Kilowatts measure the demand, or rate of energy usage, at any point in time.

¡ Kilowatt-hours measure the total amount of energy used. Why doEs dukE EnErgy mEasurE dEmand?

We need to plan for the maximum electrical demand that could be expected from your business during the year. How we plan to meet your energy needs is similar to your decision process when you purchase a car. For example, if you want a car that can go up to 90 miles per hour, it needs to have a large enough engine.

Even if you never actually get the chance to drive that fast, you plan for that possibility by buying a car with capacity to do so. Similarly, Duke Energy installs facilities to satisfy your highest energy demands, even though your operations may reach that level only a few times a year. We do this to provide adequate capacity for you on the Duke Energy system (generating plants, and transmission and distribution lines) and to ensure we properly size the equipment necessary to serve your business.

By measuring demand, Duke Energy can better ensure that facilities are properly sized and that customers are charged appropriately for their capacity needs. This helps us to meet the energy needs of all our customers.

Speedometer (kilowatts) Odometer (kilowatt-hours)

1,000 watts or 1 kilowatt 100 watts

4 See the Glossary on Page 12 for definitions of terms appearing in bold.

BASIC BILLING CONCEPTS

Most of Duke Energy’s business and institutional customers in North Carolina are billed according to standard or time-of-use rates. Standard rates vary depending on the customer’s demand for electricity and type of usage (e.g., for manufacturing purposes). Optional time-of-use rates vary by time of day, day of the week and season. Prices are lower during “off-peak” hours, on weekends and during the winter months. (See Pricing Options on page 11 for more information on rates.)

Your bill may also show an outdoor lighting fee, if you use that service.

Electricity Usage This Month Last Year

Total KWH 52,920 N/A

Days 30 N/A

AVG KWH per Day 1,764 N/A

AVG Cost per Day $134.55 N/A

Duke Energy offers a green power choice for customers

Make a contributiion to the solution and support a cleaner environment with solar or wind power for as little as $4 a month. All contributions are tax-free and tax-deductible. Find our how at www.duke-energy.com/pace or call 1-800-943-7585.

For Correspondence: POBOX 1090 CHARLOTTE NC 28201-1090 DUKE PHONE: 800-653-5307 www.duke-energy.com RETURN THIS PORTION WITH YOUR PAYMENT TO THE ADDRESS BELOW. THANK YOU FOR YOUR BUSINESS

00000000000000000000000000000000000000000000 88 0 88 0 L ACME ENTERPRISES

Account Number 0123456789

4980 CHURCH STREET

Verification Code

Service From: APR 23 to MAY 23 (30 Days) Your next scheduled meter reading will occur between JUN 22 and JUN 17

1 Bill Date_{Current Charges Past Due After} 05/21/2012_06/07/2012 PAYMENTS

(-) NEW CHARGES(+) ADJUSTMENTS(+ OR -) AMOUNT DUE(=) PREVIOUS BILL

AMOUNT

$3,823.82 $3,823.82 $4,318.97 $0.00 $4,318.97

METER METER READINGS: MULTI- TOTAL RATE SCHEDULE AMOUNT

NUMBER PREVIOUS PRESENT PLIER USAGE DESCRIPTION

123456 LGS-Large General Service

0.00 0.31 360 112 KW Actual Demand 112 KW Billing Demand 170 317 360 52,920 KWH Electricity Usage 4,036.42 Sales Tax 282.55 Amount Due 4,318.97 ACME ENTERPRISES 4980 CHURCH STREET GREENWOOD SC 29646-4552 PO BOX 70516 CHARLOTTE NC 28272-0516 Account Number 162241974B Verification Code 5 Amount Due $4,318.97

Current Charges Past Due After 06/07/2012

Total Amount Enclosed $

Visit us at www.duke-energy.com Electricity Usage This Month Last Year

Total KWH 37,804 43,004

Days 28 32

AVG KWH per Day 1,350 1,344 AVG Cost per Day $90.06 $73.67

ACME ENTERPRISES

Account Number 0123456789

4980 CHURCH STREET

Verification Code

1 Bill Date

Current Charges Past Due After 05/21/201206/04/2012

PAYMENTS

AMOUNT

$1,859.91 $1,859.91 $2,647.83 $768.39 $3,416.22

123456 OPT-Optional Power Srv, TOU

Customer Charge 38.83

81.22 81.22 80 94 KW On-Peak Actual Demand (Winter)

94 KW On-Peak Billing Demand 831.63

112.73 112.73 80 94 KW Off-Peak Actual Demand

7521 7521 80 8,880 KWH On-Peak Energy (Winter) 567.63

92527 92527 80 27,520 KWH Off-Peak Energy 919.47

1092 1,092 KWH FL - Flood Lighting 114.38

312 312 KWH FL - Flood Lighting 49.80

Previous Months Adjustment 768.39

Municipal Fee 126.09

Amount Due 3,416.22

Standard Rate

Time-of-Use rate

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METERING ELECTRIC ENERGY AND DEMAND

The meters used at residences and some small businesses register only electrical energy usage in kilowatt-hours (kWh). The meter continuously measures the number of kWh used. At the end of each billing period (typically 30 days), a kWh reading is obtained from the meter. The previous month’s reading is then subtracted from the new reading to determine kWh consumption. In some cases, the meter registers only a portion of the kWh used, and a

multiplier is used to determine actual usage. The multiplier, if applicable, is shown on your billing statement.

Meters at most businesses, however, measure both kilowatt-hours (energy) and kilowatts (demand). Kilowatts measure the average rate at which kilowatt-hours are used during a certain time interval. The time interval used by Duke Energy is 30 minutes.

ExamplE:

If a 10-kW electrical load (like a commercial oven) is operated for 30 minutes, the demand register on the meter will record 10 kW. During this same 30 minutes, the kWh register on the meter will record the use of 5 kilowatt-hours (10 kW x ½ hour = 5 kWh). The demand register will retain this 10-kW demand unless higher demand occurs during any subsequent 30-minute interval during the billing month.

INTEGRATED DEMAND

A demand meter measures the maximum 30-minute integrated kilowatt demand during the applicable billing period. Since the demand measurement is “integrated,” or averaged over each 30-minute period during the billing month, short periods of intense use, such as the start-up of a motor, may have minimal impact on the registered demand. At the end of the billing period, Duke Energy records both the kilowatt-hour and the maximum 30-minute integrated kilowatt demand readings from the meter. The demand register is then reset so it can measure maximum demand for the following billing period.

ExamplE: 30–minutE intEgratEd dEmand profilE

This example illustrates how demand is calculated for an office with about 4,500 square feet of space, during the summer. For the first 10 minutes, the lights are on and the cooling system is running. During the next 5 minutes, the air conditioning system cycles off, but several pieces of office equipment (computers, printers and a copy machine) are in use. During the last 15 minutes, all the equipment is in use and the air conditioning system cycles on. The resulting “integrated” demand for this 30-minute period is illustrated below.

dEmand (kW):

Lights & Cooling Lights & Equipment Lights, Equipment & Cooling

30 kW x 10 minutes + 18 kW x 5 minutes + 36 kW x 15 minutes = 30 minutes 30 minutes 30 minutes

10 kW + 3 kW + 18 kW = 31 kW

Even though the maximum demand was 36 kW, the “integrated” demand is only 31 kW for this 30-minute interval.

UNDERSTANDING ELECTRIC DEMAND

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ExamplE: 24-hour intEgratEd dEmand profilE

Continuing with our small-office example, demand is low in the early morning hours, since most of the equipment is off. Maybe only a few exterior lights and the security system are on. As the business day begins, all the lights and equipment are turned on and workers begin to arrive, producing a small peak in the early hours. Then, as the outside temperature warms, the need for cooling inside the office increases, and the cooling system has to respond. Note the highlighted area between 1 p.m. and 1:30 p.m. This represents the 30-minute interval discussed in the previous example. Demand finally reaches a peak at about 4 p.m. Then, as business winds down, the outside temperature cools and the cooling system begins to cycle on and off for longer intervals, demand begins to drop. After the business closes down for the evening, demand returns to its minimal level.

0 ₁ ₂ ₃ ₄ ₅ ₆ ₇ ₈ _{9 10 11 12 1} ₂ ₃ ₄ ₅ ₆ ₇ ₈ _{9 10 11 12} 5 10 15 20 25 30 35

Quantity of Energy Consumed Demand During Each Interval

30-Minute Demand Interval

For this example, the maximum 30-minute demand for the day was 34 kW and the total energy consumed was 461 kWh.

Highest Demand of the Day

Demand (kW)

Time (Hours)

BILLING DEMAND

If you have demand readings indicated on your billing statement, you will notice two separate entries for demand. One is actual demand (or that measured by the meter) and the other is billing demand. Your electric bill is based on billing demand, which may not be the same as actual demand for the billing period. Billing demand is based on several factors depending on the rate schedule.

8 See the Glossary on Page 12 for definitions of terms appearing in bold.

ACME ENTERPRISES

Account Number 0123456789

4980 CHURCH STREET

Verification Code

1

Bill Date

Current Charges Past Due After 05/21/201206/07/2012

PAYMENTS

AMOUNT

$3,823.82 $3,823.82 $4,318.97 $0.00 $4,318.97

123456 LGS-Large General Service

0.00 0.31 360 112 KW Actual Demand 112 KW Billing Demand 170 317 360 52,920 KWH Electricity Usage 4,036.42 Sales Tax 282.55 Amount Due 4,318.97 ACME ENTERPRISES 4980 CHURCH STREET CHARLOTTE NC 28202-1234 PO BOX 70516 CHARLOTTE NC 28272-0516 Account Number 162241974B Verification Code 5 Amount Due $4,318.97

Current Charges Past Due After 06/07/2012

Total Amount Enclosed $

Visit us at www.duke-energy.com Our records indicate your telephone number is 123-456-7890. If this is incorrect, please follow the instructions on the back of the bill.

A late payment charge of 1.5% will be added to any past due utility balance not paid within 25 days of the bill date. Electricity Usage This Month Last Year

Total KWH 52,920 N/A

Days 30 N/A

AVG KWH per Day 1,764 N/A

AVG Cost per Day $134.55 N/A

Duke Energy offers a green power choice for customers

Make a contribution to the solution and support a cleaner environment with solar or wind power for as little as $4 a month. All contributions are tax-free and tax-deductible. Find our how at www.duke-energy.com/pace or call 1-800-943-7585.

For Correspondence: PO BOX 1090 CHARLOTTE NC 28201-1090 DUKE PHONE: 800-653-5307 www.duke-energy.com RETURN THIS PORTION WITH YOUR PAYMENT TO THE ADDRESS BELOW. THANK YOU FOR YOUR BUSINESS

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hOW TO READ YOUR BILL STATEMENT

1. Name and Address Information

This is the name on the account and the address where service is provided.

2. Billing Period

Shows the dates of the previous and present meter readings and the number of days included in this billing period.

3. Billing Summary

Provides a quick summary of the most recent charges, payments and total amount due.

4. Billing Details

Lists the specific items included in the calculation of the bill.

5. Energy Use and Cost Information

Compares the energy use and average daily cost for this month with the same billing period last year. If data for a billing period is not available, “N/A” will be shown.

6. Messages

Check this section of the bill statement each month along with any bill inserts for important information from Duke Energy.

7. Customer Service

Contact us 24 hours a day, seven days a week for information about your account or any of our programs or services.

8. Payment Stub

Please return this portion of the bill statement along with your payment each month. Be sure the payment address shows through the window of the return envelope, and write in the amount you are enclosing.

9. Phone Number

Duke Energy uses your phone number to respond to your outage calls more quickly. The phone number we have on your account will be shown here each month. If it is incorrect, please submit corrections by following the instructions on the back of the bill.

10. Amount Due

Shows the total amount due.

11. Next Meter Reading

Shows the range of dates during which the meter is scheduled to be read.

12. Account Information

Displays the account number, bill date and the date after which the bill is considered past due.

For More Information

Please refer to the back of the bill statement.

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PRICING OPTIONS

A number of rate schedules are available for business and institutional customers. Other pricing options may be available based on your specific circumstances – please check with your Account Manager for more information.

RATE DESCRIPTION

Schedule SGS

Small General Service

Available to the individual customer with a kilowatt demand of 75 kW or less. If the customer’s measured demand exceeds 75 kW during any month, the customer will be served under Schedule LGS. Schedule LGS

Large General Service

Available to the individual customer with a kilowatt demand of more than 75 kW. If the customer’s measured demand is 75 kW or less for 12 consecutive months, the customer will be served under Schedule SGS.

For Schedule SGS and Schedule LGS, demand is calculated as the largest of the following: • The maximum integrated 30-minute demand for the current billing period

• 50 percent of contract demand. When you apply for service, you and Duke Energy come to an agreement on the maximum electrical demand that could be expected from your business. This provides adequate capacity for you on the Duke Energy system and allows Duke Energy to properly size the equipment necessary to serve your business.

• 50 percent of the maximum integrated 30-minute demand during the billing months of June through September • 30 kW

Schedule I

Industrial

Available to businesses classified as “manufacturing industries” by the Standard Industrial Classification (SIC) Manual, provided that more than 50 percent of the electric usage is for manufacturing processes.

Where the company has verified that all environmental space conditioning is supplied electrically, an alternate billing demand provision applies (I all-electric), resulting in a lower bill on an annual basis. For Schedule I, demand is calculated as the largest of the following:

• The maximum integrated 30-minute demand during the last 12 months (Schedule I) or the maximum integrated 30-minute demand for the current billing period (Schedule I all-electric)

• 50 percent of contract demand. When you apply for service, you and Duke Energy come to an agreement on the maximum electrical demand that could be expected from your business. This provides adequate capacity for you on the Duke Energy system and allows Duke Energy to properly size the equipment necessary to serve your business.

• 50 percent of the maximum integrated 30-minute demand over the previous 12 months (Schedule I all-electric) • 30 kW

Schedules OPT-G, OPT-I and OPT-h

Time-of-Use

Available to nonresidential customers. Charges vary according to the time of day, day of the week and season when energy is used. Prices are lower during “off-peak” hours, on weekends and during winter months.

These rates are more likely to be advantageous to customers with a high load factor, or other customers who have a significant portion of their usage occurring during “off-peak” times.

OPT-G is available to general service customers. OPT-I is available to industrial customers. OPT-H is available to customers with an annual load factor of 75 percent or more and at least 1,000 kW, in a new establishment or an existing establishment with a SIC code of 7373 or 7374.

On-peak and off-peak hours differ according to the season. An economy demand charge is applicable if off-peak demand exceeds on-peak demand during the billing month.

PRINCIPAL ELECTRIC PRICING OPTIONS

ON-PEAk DEMAND

On-peak billing demand is calculated as the largest of the following:

• The maximum integrated 30-minute demand during the applicable summer or winter on-peak hours for the current bill

• 50 percent of your contract demand • 15 kW.

Generally, if your business operates during hours outside the typical workday of 8 to 5, five days a week, you may benefit from a time-of-use rate. Examples of where this would be beneficial are businesses open six or seven days a week such as a convenience store or retail business. Businesses with significant energy usage on weekends or late evening hours such as an auto dealer, restaurant or theater could also benefit. However, time-of-use is not likely to be advantageous to customers using less than 2,500 kWh per month.

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MULTIPLIER

Used to calculate actual usage for meters that register only a portion of kilowatts or kilowatt-hours used. The meter multiplier is normally shown on the face of the meter and is shown on the bill.

TARIFF

A document filed by a utility with a regulatory commission, listing the rates the utility will charge to serve its customers, along with terms and conditions.

VOLT

Unit of measurement of electromotive force.

WATT

The electrical unit of real power. The rate of energy transfer equivalent to one ampere flowing under an electrical pressure of one volt at 100 percent power factor. The rate of energy consumption.

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GLOSSARY OF TERMS (CONTINUED)

GLOSSARY OF TERMS

ACTUAL DEMAND

Maximum integrated (average) demand used by a customer during a billing period. Under Duke Energy’s rate schedules, the demand is averaged over a 30-minute period.

AMPERE

Unit of measurement of electric current.

BASIC FACILITIES ChARGE

A monthly charge based on costs associated with metering, meter reading, billing, etc., exclusive of demand or energy consumption.

BILLING DEMAND

The demand value used for billing purposes on the customer’s monthly bill.

DEMAND

The rate at which energy is delivered, measured in kilowatts (1,000 watts) and averaged over 30-minute intervals.

ECONOMY DEMAND

On a time-of-use rate, the amount by which the maximum off-peak demand for the month exceeds the on-peak demand.

ENERGY

The amount of electricity a customer uses during the billing period, in kilowatt-hours (kWh). In some cases, an electric meter registers only a portion of the kWh used, and a meter multiplier must be used to determine the customer’s actual usage. Any multiplier, if applicable, is shown on the customer’s bill.

FUEL ADjUSTMENT CLAUSE

An adjustment to a customer’s bill used to recover Duke Energy’s cost of fuel used to generate electricity. The state utility commissions conduct annual proceedings to evaluate fuel costs. After review, the commissions may order that rates increase or decrease to reflect changes to the cost of fuel only.

kILOWATT (kW)

A unit of electric demand or capability.

kILOWATT-hOUR (kWh)

A unit of electric energy. kW x hours= kWh

LOAD FACTOR

The ratio of the average electrical load divided by peak load during a designated period of time, expressed as a

percent. As an example, if a business used 10,000 kWh during one month (720 hours) and had a maximum demand of 25 kW, then the load factor would be 56 percent.

{10,000 kWh/(720 hours x 25 kW)} x 100% = 56%

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UNDERSTANDING YOUR ELECTRIC BILL