What is Maximum demand charges?

What it is

Utilities size their networks for peak load, so many tariffs bill large customers for both the energy they use, in kWh, and the highest demand they place on the grid, in kW or kVA. The demand is usually the average over a fixed interval, such as 15 or 30 minutes, depending on the utility.

Some tariffs also have a contract demand, with extra charges when actual maximum demand exceeds it, or a ratchet that carries a high peak forward into later months. These rules vary by utility, so the tariff schedule is the source of truth.

Peaks often come from loads starting together: compressors, chillers, furnaces or pumps after a shutdown, or a shift change where several lines start at once.

Who it applies to / where it is used

Maximum demand charges apply to most industrial plants, commercial buildings, hospitals, airports and campuses on high tension or demand-metered tariffs. Energy managers and finance teams both have a stake, because demand can be a large share of the bill.

How it is measured / what evidence it needs

Managing demand needs interval data that matches the utility's demand interval, with enough detail to know which loads made the peak.

• Interval kW or kVA at the main meter, at the utility's interval
• Monthly maximum demand against contract demand
• Feeder or load-level demand at the time of each peak
• Start-up sequences and coincident loads
• Demand charges on the bill

How Aqueduct helps

Aqueduct shows demand building in real time and which loads are driving it, so peaks can be prevented rather than explained.

• aQ EnergySmart tracks demand against contract limits and forecasts the interval peak
• Load disaggregation identifies which feeders and machines create each peak
• Where control is enabled, with owner approval, non-critical loads can be staggered or shed
• Tariff configuration shows the cost of each peak avoided