Energy · Problem-solving calculator
Demand Charge Calculator
Estimate an electric demand charge from measured peak demand, a billing-demand minimum, and the utility demand rate.
- Free to use
- Runs in your browser
- Level B · Industry formula
- Last reviewed 2026-08-17
Calculator guide
What this calculator helps you solve
Estimate an electric demand charge from measured peak demand, a billing-demand minimum, and the utility demand rate.
Inputs explained
- Measured peak demand (kW) — enter the value that applies to your operation or scenario.
- Minimum billing demand, if applicable (kW) — enter the value that applies to your operation or scenario.
- Demand rate ($/kW) — enter the value that applies to your operation or scenario.
- Billing months in scenario — enter the value that applies to your operation or scenario.
Formula and methodology
Worked example
A 420 kW measured peak subject to a 450 kW billing-demand minimum at $18/kW produces an estimated $8,100 demand charge for one month.
How to interpret the result
Use the result for tariff scenario analysis only. Actual utility billing demand can involve ratchets, seasonal rates, coincident peaks, time windows, power factor, or other tariff provisions.
What to keep in mind
- Enter the billing-demand floor only if it applies; use zero otherwise.
- Review the actual utility tariff before making an investment or operating decision.
Review approach
This calculator uses deterministic arithmetic and performs the calculation locally in your browser. Its value comes from combining operational inputs into a decision-oriented result rather than returning a one-line conversion.
Review standard: Level B · Industry formula. How calculator reviews work.
Frequently asked questions
What decision can this calculator support?
Use the result for tariff scenario analysis only. Actual utility billing demand can involve ratchets, seasonal rates, coincident peaks, time windows, power factor, or other tariff provisions.
How is the result calculated?
Billing Demand = max(Measured Peak kW, Minimum Billing Demand kW); Demand Charge = Billing Demand × Demand Rate × Months.
Are the assumptions universal?
No. Operational, regulatory, technical, and industry assumptions vary. Use values that apply to your situation and verify professional or regulatory requirements where relevant.
Does CalculateMeasure store the values I enter?
The calculation runs in your browser and does not require sending the entered calculator values to a server to produce the result.