About The Demand Charge
An independent publication about how commercial and industrial electricity is priced, written by someone whose training is in costs rather than in switchgear.
Last updated 2026-08-08
What this site is for
Most explanations of a demand charge stop at the definition. They tell you it is billed in dollars per kilowatt, that it reflects the highest fifteen-minute average of the month, and then they move on. That is where the useful part starts, not where it ends.
The Demand Charge exists to carry on past the definition: to show which line on the statement the charge lands on, what the tariff actually says about how the interval is measured, what a ratchet does to the eleven bills that follow a bad afternoon, and what a kilowatt of avoided peak is worth once you have priced it properly. Every piece here is written so that the arithmetic is on the page and you can check it against your own bill.
The subject is unusually well suited to being written about honestly, because almost everything that matters is published. Utility tariffs are public documents filed with state commissions. Federal agencies publish the price and consumption data. The tax treatment of energy equipment is in the Internal Revenue Code. A site that reads those documents carefully and does the sums in the open is doing something a summary of other people's summaries cannot.
Who writes it
The Demand Charge is written and edited by Nil Masferrer Jiménez, Editor and cost analyst.
The relevant background is administration and finance: cost analysis, total cost of ownership and return-on-investment modeling, appraising capital requests, and reading primary regulation and published tariff sheets directly rather than through somebody else's paraphrase.
That is a specific competence and it maps onto a specific part of this subject. A demand charge is a pricing mechanism before it is an engineering problem. Deciding whether a battery or a control upgrade is worth buying is a capital appraisal question. Working out whether a site is on the wrong rate schedule is an exercise in modeling one data set against two published price structures. Those are the questions this site is best at.
What that does not include
The author does not operate industrial plant, does not commission chillers and does not hold an electrical license. Nothing on this site is written as if from the plant floor, and you will not find invented anecdotes about a facility that does not exist.
Where a piece touches equipment behavior — how a capacitor bank interacts with harmonics, what a variable frequency drive does to displacement power factor — it is grounded in cited engineering sources and it says so, with the source linked so you can read past the summary. Where the right answer depends on a specific site, the piece says that too rather than pretending a general rule exists.
How the work is done
Every article follows the same sequence. The tariff mechanism is described from a published tariff or a regulator's own explanation. The arithmetic is worked in full rather than asserted, so the reader can substitute their own numbers. Claims that carry a figure are linked to the body that published the figure. Claims that cannot be sourced are removed, not softened.
The result is a smaller site than it could be. Several planned articles were cut because the central claim turned out to rest on nothing more solid than three other blogs repeating each other.
Where the numbers come from
The recurring primary sources across the library are the U.S. Department of Energy and its Better Buildings programs, the Energy Information Administration for price and consumption data, the National Renewable Energy Laboratory for storage and generation cost work, Lawrence Berkeley National Laboratory for rate design and demand research, ENERGY STAR for building energy practice, ASHRAE for the engineering standards, the Federal Energy Regulatory Commission and the individual state utility commissions for tariff and regulatory questions, and the Internal Revenue Service for the tax treatment of energy equipment.
- U.S. Department of Energy
- U.S. Energy Information Administration
- National Renewable Energy Laboratory
- Lawrence Berkeley National Laboratory — Energy Markets and Policy
- ENERGY STAR for buildings and plants
- Federal Energy Regulatory Commission
Scope
This is a United States publication. Prices are in dollars, units are kilowatts and kilowatt-hours, spelling is American, and the regulatory framework described is the federal one plus the state commissions and the regional transmission organizations. European tariff structures use different determinants and different vocabulary, and mixing the two would produce something that is wrong in both markets.
How it is funded
By advertising, and eventually by affiliate commission on software the site recommends. Neither arrangement gives an advertiser any say over what is written. The full position is set out in the advertising disclosure, and the standards the writing is held to are in the editorial policy.
Corrections
If something here is wrong, it gets fixed and the fix is dated. Send the page and the sentence to contact@thedemandcharge.com or use the contact form.