You shopped for the lowest rate per kWh for your business. So what’s this other charge on your bill?
Business customers often pay a commercial electricity demand charge in addition to the cost per kWh. A demand charge is a fee based on the highest amount of power a customer draws during any 15 minute interval. Demand charges are established annually, and can add 30% or more to your electricity bill.
Read on to find out what is a demand charge, how demand charges are set, typical load factor by type of business, how your load factor impacts your demand, and most importantly, how to reduce your demand charges.