What does the billing factor for ESA depend upon?

The billing factor for an Energy Savings Agreement (ESA) primarily depends on Base Demand and kilowatt-hours (kWh). This is because the ESA is structured to reflect the actual usage and demand of energy consumption over a specified period.

Base Demand refers to the maximum demand of the customer during a defined period, which helps determine the appropriate level of service required. kWh, on the other hand, measures the total energy consumed, which is crucial for billing purposes. The combination of these two metrics provides a comprehensive view of a customer's energy profile, enabling utilities to accurately bill for the energy services provided.

This understanding is important because the billing factors must align with actual consumption patterns to ensure fair pricing for customers while allowing utilities to recover costs related to energy delivery effectively. In contrast, other options such as charges for additional services, customer growth, and annual revenue may influence other aspects of utility operation or service offering but are not the primary metrics for determining the billing factor in the context of an ESA.