A demand charge is the part of a commercial electric bill priced on the customer’s highest rate of consumption during the billing period, measured in kilowatts, rather than on total energy used in kilowatt-hours. A single 15-minute spike can set the charge for the month.
Why EV charging is exposed
- A bank of chargers running at once creates exactly the kind of short, high peak a demand charge is designed to bill. At some commercial charging sites the demand charge is the largest line on the bill.
- California’s utilities have restructured the charge for EV rates: PG&E and SDG&E use kilowatt subscription rates, and Southern California Edison has suspended demand charges on its EV rates through 2029, with a return dated January 1, 2030.
What an operator can do
Managed charging and an automated load management system hold the site under a target kilowatt ceiling by spreading sessions across the dwell time. Case studies report 35 to 55 percent reductions in EV-related demand charges without reducing charging availability. See also kW versus kWh.