Demand charges are fees based on your highest level of power draw rather than the total amount of electricity used. Utilities measure the maximum demand your business places on the grid during a billing cycle, typically in kilowatts, and use that figure to recover the cost of maintaining sufficient generation and distribution capacity. If you switch on several large pieces of equipment at once or have a brief spike in usage, your demand charge will increase even if your overall consumption is modest. These charges are separate from the per‑kWh energy rate and can account for a significant portion of commercial electricity bills. To keep them under control, try staggering the start‑up of energy‑intensive equipment, shifting non‑critical processes to off‑peak times, or using energy management systems and storage to limit your peak draw.
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