Think of it like the "peak traffic hour" for your electricity usage. Even if you use very little power for 23 hours a day, the utility company must be ready to supply your one hour of heavy usage. Your Maximum Demand charge reflects that peak capacity they must reserve for you. This is the most common point of confusion.
| | Maximum Demand (kW or kVA) | | :--- | :--- | | Total amount of electricity used over a month. | The highest average power drawn at any single moment. | | Billed for what you use . | Billed for the peak rate you use it . | | Analogy: The total gallons of water used. | Analogy: The size of the pipe needed to deliver the water. |
What is Maximum Demand? In simple terms, Maximum Demand (MD) is the highest average amount of power (measured in kilowatts, kW, or kVA) that you draw from the electrical grid or a generator over a specific, short period—typically 15, 30, or 60 minutes.
