Demand Charge Management
Demand charge management refers to strategies that reduce a facility's billed peak demand so that monthly distribution and transmission charges decline. Techniques include load shifting, battery storage dispatch, intelligent EV charging, and process scheduling that flattens coincident peaks. Industrial customers pursue these measures to avoid costly upgrades and to make electrification projects economical.
Utilities calculate demand charges using the highest 15-minute or hourly load interval recorded each billing cycle, sometimes layered with coincident peaks that align with system demand. Demand charge management software analyzes historical interval data, forecasts upcoming peaks, and orchestrates controllable loads or storage accordingly.
With widespread adoption of EV fleets and electrified heating, demand charge management has become essential to prevent distribution bottlenecks. Some regulators now offer demand charge credits or pilots that reward aggregated control programs which can also participate in utility flexibility markets.
Project developers integrate demand charge management value streams into behind-the-meter storage and microgrid financing, while utilities incorporate customer programs into non-wires alternative portfolios. Transparent metering and telemetry are critical so savings can be verified and monetized.
Technical Details
- •Targets utility tariff components based on maximum interval demand
- •Uses predictive analytics, storage dispatch, and controllable loads
- •May integrate with virtual power plant or demand response programs
- •Requires interval metering, telemetry, and verification
- •Savings depend on tariff structure, coincidence factors, and load flexibility
Why It Matters
Demand charge management unlocks capital efficient paths to electrify fleets and industrial processes. Tera tracks tariffs, customer programs, and technology deployments so developers can quantify savings and package them with storage or microgrid proposals.
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