Demand Charge
Use the Demand Charge. Enter Peak demand (kW) and Demand rate per kW for a clear result, formula explanation, and practical planning checks.
Demand Charge measurements
Enter your values, then calculate.
Result
How to calculate demand charge
This calculator finds a utility demand charge by multiplying peak demand (kW) by the demand rate — many commercial electricity bills include a separate charge based on peak power draw, not just total energy used.
How the calculation works
Demand charge = Peak demand (kW) × Demand rate ($/kW).
Example
A peak demand of 85 kW at a $12/kW demand rate: Demand charge = 85 × 12 = $1,020.
Frequently asked questions
How can I reduce my demand charge?
Since demand charges are based on your highest peak draw, staggering the startup of large equipment (rather than starting everything simultaneously) and using demand-limiting controls can lower your peak without necessarily reducing total energy use.
Demand Charge
Demand charge = Peak demand (kW) × Demand rate ($/kW).
Let's understand your demand charge result.
Calculate a result above and this guide will help you interpret it using this calculator's own formula and explanation.
Pro Tips for Demand Charge
- Demand charges are based on your highest sustained draw during the billing period (often a 15-30 minute window), not your average usage — a single spike can set the charge for the whole month.
- Load management strategies (staggering equipment startup, demand limiting controls) can meaningfully reduce demand charges for commercial accounts.
Common Demand Charge Mistakes to Avoid
- Confusing demand charges (based on peak kW) with energy charges (based on total kWh consumed) — they're billed differently and respond to different usage patterns.
When to Use This Calculator
This calculator finds a utility demand charge by multiplying peak demand (kW) by the demand rate — many commercial electricity bills include a separate charge based on peak power draw, not just total energy used.