Tariff & Peak Demand Calculator
Enter peak demand, energy, rates and power factor to see the bill, load factor and peak-shaving savings.
Step-by-step
- Enter valid values to begin.
Simplified single-rate model: demand is billed on the highest 15-minute kW (or kVA) of the cycle, energy at one flat rate, plus a monthly fixed charge. Time-of-use rates, seasonal demand rates, taxes and riders are not modelled. The ratchet bills at least the stated percentage of the historic peak; PF methods and ratchet terms differ between utilities, so check your own tariff.
Tariff and Peak Demand: Why One Quarter Hour Can Set the Month
Core Engineering Principles
A commercial bill has two very different parts. The energy charge pays for kilowatt-hours you actually used. The demand charge pays for the capacity the utility had to hold ready for you, and it is set by a single number: the highest average kW in any 15-minute window of the cycle. Fixed windows reset on the quarter hour; rolling windows slide every minute or so and catch peaks that straddle a boundary. Many tariffs also add a ratchet, which bills at least a stated percentage, often 60 to 90%, of your highest peak in the previous eleven months. One bad afternoon can then follow you for a year.
Power factor enters because the utility sizes wires and transformers for kVA, not kW. Tariffs handle low PF in two common ways. Either they bill kVA directly, which is kW divided by PF, or they bill the larger of your peak kW and kVA multiplied by a contract PF. Load factor tells you how flat your use is: kWh divided by peak kW times hours in the cycle. Above 70% you use your connection well. Below 50% you pay for a big pipe that is mostly empty, and every kW shaved off the peak is worth the full demand rate.
LF = kWh / (Peak kW × hours) × 100%
NEC & Standard References
ANSI C12.1 is the American national standard for electricity metering, and the accuracy classes it defines (for example 0.2 and 0.5) are what make demand and energy readings billable. IEEE Std 1459 defines active, reactive and apparent power under sinusoidal and distorted conditions, including under harmonic distortion. The tariff itself is a regulated document filed with your utility commission. Rate structures, windows, ratchets and PF clauses vary by utility, so read your own schedule and verify the current rates.1. kVA = 420 / 0.82 = 512.2 kVA; × 0.90 = 461.0 kW, which exceeds 420, so 461.0 kW is billed.
2. Demand = 461.0 × 12 = $5,531.71 (PF surcharge: $491.71 over 420 × 12 = $5,040).
3. Energy = 168,000 × 0.09 = $15,120.00; fixed $150.
4. Total = $20,801.71, or $0.1238 per kWh all-in. Demand is 26.6% of the bill.
5. LF = 168,000 / (420 × 720) = 55.6%, a fair score.
6. Cut the peak 10% to 378 kW: billed kW falls to 414.9, saving about $553 per month.
- One start-up spike sets the month. Stagger large motor starts.
- Cold-load pickup after an outage. Everything restarts at once and the inrush can set a new peak, plus a ratchet. Sequence the restart.
- Peak shaving has trade-offs. Batteries and generators cost money to cycle, a missed peak window wastes the investment.
- Capacitor banks and harmonics. Correcting PF on a bus with drives can create a resonance. Check distortion first and consider detuned reactors.
- Time-of-use rates are not modelled. Neither are taxes, riders or seasonal demand rates, so treat the result as an estimate.