Demand Charges
Charges based on your highest sustained power draw during a billing period.
Definition
Demand charges bill you for the peak rate of consumption (in kW) recorded during the period, reflecting the capacity your service must be able to deliver.
Detailed explanation
Because the grid and utility infrastructure must be sized for your maximum draw, demand charges recover the cost of that capacity. A single spike — such as starting large equipment simultaneously — can set your demand charge for the entire month.
Why it matters
For many commercial accounts, demand charges are a large share of the bill. Staggering equipment startup, load shifting, and on-site storage can all reduce them.
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