Defined term

Electricity demand charge

An electricity demand charge is the portion of an electric-service bill based on the customer's measured or calculated maximum capacity usage under the applicable rate schedule.

Also known as billing demand charge

grid · Concept code GS-CONCEPT-062 · Last verified August 20, 2026

Evidence through 2020-05-13 · 1 source has no source-event date

Content modified 2026-08-20

Definition and boundaries

Definition

An electricity demand charge is the portion of an electric-service bill based on the customer's measured or calculated maximum capacity usage under the applicable rate schedule.

Applicable jurisdiction: US; rate schedules vary

Definition claim verification: Verified August 20, 2026

In plain language

For Electricity demand charge, the controlling utility tariff, interconnection document, meter arrangement, and jurisdiction matter more than a generic national description.

What it is not

It is not a charge based only on total monthly kilowatt-hour consumption.

Decision context

Why it matters

The demand interval, ratchet, season, time period, measurement, minimum, units, and customer class must be read from the tariff before solar or storage savings are modeled.

Applicable jurisdiction: US; rate schedules vary

Decision-context claim verification: Verified August 20, 2026

Information boundary

This page provides general educational context, not a site design, production guarantee, utility determination, contract interpretation, legal opinion, tax conclusion, or individualized financial advice. Verify property, equipment, utility, jurisdiction, program, and agreement details before acting.

Selector-derived public graph

Primary topic: Finance

Broader topic

Electricity pricingPublished conceptElectricity demand charge is a more specific concept under Electricity pricing

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