Energy & Sustainability worked example

Utility Demand Charge at 72% billing applicability: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop billing applicability to 72%, then walk the calculation through step by step. Estimate monthly utility demand charge from billing peak kW, demand rate, billing applicability, and fixed utility fees.

The inputs for this scenario

  • Billing peak demand: 920 kW (held at the documented default)
  • Demand charge rate: 18.5 $ / kW (held at the documented default)
  • Billing applicability: 72 % (the input this scenario stresses; the baseline uses 100)
  • Fixed demand-related fees: 450 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable demand charge = billing peak demand × demand charge rate × billing applicability.
  • Total utility demand charge works out to 12,704 $ at these inputs, and this is the headline figure for the scenario.
  • Demand charge per billed kW works out to 13.81 $ / kW at these inputs.
  • Variable demand charge works out to 12,254 $ at these inputs.
  • Fixed demand-related fees works out to 450 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where billing applicability sits at 100% and the headline result is 17,470 $, this scenario comes in 27.28% below the baseline at 12,704 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to billing applicability, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It models a single billing period and rate; it does not capture demand ratchets that lock in past peaks, time-of-use demand windows, or tiered rates, which your tariff may impose.

Results at a glance

  • Total utility demand charge: 12,704 $ (headline result)
  • Demand charge per billed kW: 13.81 $ / kW
  • Variable demand charge: 12,254 $
  • Fixed demand-related fees: 450 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Utility Demand Charge calculator, set billing applicability to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.