US demand charge explainer

A US electricity demand charge can depend on more than the highest demand measured this month. The tariff may also refer to a historical demand ratchet or a minimum billed demand. This explainer compares those entered quantities and applies the demand rate to the highest applicable figure, helping you isolate this component from energy, delivery, tax and other bill lines.

What the result shows

The model compares measured peak demand, historical demand multiplied by the entered ratchet percentage and the entered minimum billed demand. It uses the highest figure and multiplies it by the demand rate. Enter a rate per kW for the applicable period, rather than an energy rate per kWh. Tariffs using other time windows or demand definitions need their own calculation.

Prepare the information for this review

The labels in the tool describe the measurement or record needed for each input. The following checks help keep the entered information consistent with the case you intend to review.

• Current measured peak (kW): Enter a plain number in the unit shown, without a currency symbol or thousands separators. Keep the same measurement basis throughout the comparison and retain the source figure for checking.
• Relevant historical peak (kW): Enter a plain number in the unit shown, without a currency symbol or thousands separators. Keep the same measurement basis throughout the comparison and retain the source figure for checking.
• Contract ratchet (%): Enter a plain number in the unit shown, without a currency symbol or thousands separators. Keep the same measurement basis throughout the comparison and retain the source figure for checking.
• Demand charge ($/kW): Enter a plain number in the unit shown, without a currency symbol or thousands separators. Keep the same measurement basis throughout the comparison and retain the source figure for checking.
• Contract minimum billed demand (kW): Enter a plain number in the unit shown, without a currency symbol or thousands separators. Keep the same measurement basis throughout the comparison and retain the source figure for checking.

Check the result against the source records

Uses the greatest of measured peak, entered ratchet demand and entered minimum. Confirm the actual demand interval, season, ratchet period and bill formula.

Start with one case whose inputs you can trace back to the original records. Run the tool and compare its labels, units and dates with that example before preparing a wider review. If a value is uncertain, record the uncertainty in your working notes and resolve it with the person who holds the source information. A neatly presented result is useful only when the assumptions behind it are also clear.

Keep a copy and agree the next action

Use Download report to keep the written result and Download results CSV when you want to work with its records in a spreadsheet. Save inputs keeps a JSON file that can be restored into this same tool later. Editing an input hides the old result until you run the tool again, which helps avoid sharing an output that belongs to an earlier set of assumptions.

Where report emailing has been configured, Email my results lets you request a copy and send the same inputs and result to this site for follow-up about your request. The form explains who receives the copy and requires a completed security check. Check the recipient address carefully before sending. The email request uses the current result, so review the entered information before choosing that option.

For help with the next step, Explore specialist support.