What are capacity or transmission charges?

Capacity charges (sometimes called demand or capacity costs) pay for the infrastructure required to ensure the grid can meet peak demand. These charges are based on your business’s peak demand during a specific period and are typically passed through from the grid operator. Transmission charges cover the costs of transporting electricity over high‑voltage lines from generators to local distribution networks. Both fees appear as separate line items on your bill and are regulated by regional transmission organizations. You cannot avoid these charges entirely, but reducing peak demand and choosing a supplier that passes them through at cost can help manage them.