Business energy guides
Why a short power peak can affect your business bill
A demand charge relates to how much power your business draws during a specified measurement period. It is different from the usage charge for total electricity consumed. The tariff determines which intervals, seasons and rates apply.
By the Check Your Energy Bill team · Updated
Check my business billSame energy. Different peak.
Both examples use 40 kWh across four one-hour periods.
Equipment running together
25 kW peakEquipment spread across the day
10 kW peakIllustrative one-hour averages, not a billing measurement. Actual demand tariffs use their own intervals, windows and rules.
What is the difference between kW and kWh?
Kilowatts (kW) measure power. Kilowatt hours (kWh) measure energy used over time. In a simplified example, equipment drawing 10 kW continuously for two hours uses 20 kWh.
Two businesses can use the same total energy but have different peaks. A kitchen starting several large appliances together may draw more power at once than a site that runs equipment at separate times.
How is a demand charge calculated?
Read the tariff’s measurement window, demand unit and billing rule together. Some tariffs use a peak measured within specified hours, with rates or rules that vary by season. Do not assume the biggest reading anywhere in the day is the one used for billing.
Illustrative calculation: if a tariff bills a 20 kW demand at $0.25 per kW per day for 30 days, the demand component is $150. This excludes usage, supply and other charges. It is not an available tariff.
Where should you look on the bill?
Look for a separate demand or capacity line, often showing kW or kVA, a rate and a billed quantity. Ask the retailer for the tariff schedule and the interval data used if the calculation is unclear.
kVA and kW are different measurements. If your tariff uses kVA, do not substitute a kW figure without checking how that tariff works. A retailer or qualified energy adviser can help interpret it.
Can you reduce the measured peak?
First identify when the relevant peak occurs and which equipment is operating. Where practical and safe, staggering equipment start-up or changing a schedule may help. Test changes against the tariff’s actual measurement window.
Do not compromise food safety, ventilation, staff comfort requirements or essential production. An electrician or equipment specialist should assess changes to electrical equipment. A lower peak does not guarantee a lower overall bill.
Why a simple plan comparison may be incomplete
A usage-and-supply estimate does not include a complete demand assessment. Ask for a comparison that uses the same interval data, demand rules and full charges across offers.
Our automated shortlist is not a complete quote for demand tariffs. Confirm the demand component with the retailer before relying on a potential saving or accepting an offer.
Sources and further reading
Sources checked 26 October 2026. Rates and eligibility can change. Your comparison shows its own data verification date.
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