Peak kW demand charges start with one number—the highest power draw your site hit in the billing window. This guide shows how to calculate peak kW demand charges from interval meter data, demand charge rates, and the monthly dollar line that sits beside energy kWh costs.
Benefits
- Walkthrough: billing peak kW × $/kW = monthly demand charge.
- Clarifies 15-minute interval peaks vs. instantaneous amp readings.
- Annual demand total for comparing peak-shaving projects and load staging.
How it works
- Pull the highest kW interval from your utility portal or demand meter export.
- Enter the demand charge ($/kW) from your commercial rate schedule rider.
- Multiply peak kW by $/kW for monthly demand charges; scale × 12 for annual.
FAQ
How do I calculate peak kW demand charges?
Demand charge = billing peak kW × $/kW per month. Example: interval data shows 72 kW max in a 15-minute window → 72 × $14/kW = $1,008/mo demand charge (~$12,096/yr). Use the utility’s billing peak definition—often the highest 15-min average kW in the cycle.
Where do I find billing peak kW?
Commercial interval meters and utility customer portals list kW by timestamp. Sort for the maximum interval in the billing month. If you lack interval data, sum running equipment kW for a conservative estimate—but metered peaks are what utilities bill.
Does lowering peak kW reduce demand charges proportionally?
Yes—demand charges scale linearly with billing peak kW at a fixed $/kW rate. Shaving 10 kW from a 80 kW peak at $12/kW saves $120/month every month that peak stays lower. Rerun the calculator with before/after kW to quantify battery or load-control ROI.
Technical specifications
- Billing peak kW = max(15-min average kW) in billing period (typical).
- Monthly demand charge = peak_kW × $/kW.
- Annual demand charge ≈ monthly_demand × 12.
- Related: commercial-demand-charge-calculator, peak-shaving-potential.
kW is power, not energy
Demand charges use kilowatts—power at an instant averaged over an interval—not kilowatt-hours. A 70 kW peak for fifteen minutes can cost more in demand fees than thousands of kWh spread evenly. When you calculate peak kW demand charges, you are pricing capacity the grid had to serve at one moment.
Find the interval the utility bills
Most tariffs use the highest 15-minute average kW in the month. Some use 30-minute windows or coincident peaks with the utility’s system peak. Download interval CSVs and filter to the billing period before multiplying by $/kW—guessing from a single amp clamp reading often misses the true spike.
Model before-and-after kW for projects
Peak shaving ROI is the delta in kW times $/kW. Enter current billing peak, then a target peak after staggered HVAC, a battery discharge cap, or shedding EV chargers during noon pulses. The calculator’s annual line turns kW engineering into a dollar budget line finance teams understand.