How to use this calculator
- Enter or choose energy used in the period.
- Enter or choose energy price per kWh.
- Enter or choose peak demand this period.
- Enter or choose demand charge per kW.
- Enter or choose demand ratchet.
- The bill before tax updates as you type. Use Copy result or Share to keep it.
Method
Billed kW = max(Peak kW, Ratchet% × Earlier peak); Bill = Billed kW × Demand rate + kWh × Energy rate + Fixed; Load factor = kWh ÷ (Peak kW × Days × 24)
- Peak kW
- highest metered demand in the period
- Ratchet%
- share of an earlier peak that sets a minimum billed demand
- Load factor
- average demand as a share of peak demand
Worked example
- Demand charge = 100 kW × 12 = 1,200; energy = 30,000 × 0.10 = 3,000.
- Bill = 1,200 + 3,000 + 50 = 4,250 (0.1417 per kWh).
- Load factor = 30,000 ÷ (100 × 30 × 24) = 30,000 ÷ 72,000 = 41.67%.
A 100 kW peak adds 1,200 to a 4,250 bill, 28% of the total, with a load factor of 41.67%.
What the result means
A low load factor means short, sharp peaks are driving the bill. Staggering equipment start-ups, shifting loads or a battery to shave peaks can cut the demand charge without reducing kWh.
Assumptions and limits
- One demand rate and one energy rate for the period.
- Taxes are excluded; add them separately.
- Time-of-use demand windows, power-factor penalties and reactive charges are not modelled.
Questions
What is a ratchet clause?
A tariff rule that bills demand at no less than a set percentage of the highest peak in recent months, so one spike can raise bills for up to a year.
What is a good load factor?
Higher is cheaper per kWh. A facility running steadily around the clock approaches 100%; one with brief daily peaks may be well under 50%.