Service
Demand Management
Peak charges are the largest single line item most facilities ignore.
At a glance
- Demand charge reduction
- 12 to 30%
- Demand response revenue
- $25 to $75 per kW-month
- Payback on power factor correction
- 12 to 36 months
Demand charges, billed in dollars per kilowatt of peak draw, often represent 40 to 60 percent of a commercial electric bill yet receive almost none of the optimization attention. Demand management combines load curtailment during the utility-defined peak windows, demand response program enrollment, ratchet clause analysis, and power factor correction. The savings compound month over month and persist as long as the operational changes hold.
- Identifies the specific equipment driving your peak demand events
- Enrolls qualifying facilities in PJM and utility demand response programs
- Audits ratchet clauses and minimum-bill provisions for inflated charges
- Quantifies power factor penalty exposure and correction ROI
What we find
The specific patterns this discipline catches
- 01
Demand spike events traceable to specific equipment cycles or control failures
- 02
Demand ratchet provisions inflating bills for eleven months after a single peak
- 03
Power factor below the utility-required threshold producing reactive penalties
- 04
Demand response program eligibility worth thousands per year per megawatt
- 05
Poor load factor signaling unnecessary capacity charges
How this engagement runs
From first bill to documented savings
We start with fifteen-minute interval data and bill-level demand reads to map your peak profile. We identify the specific equipment cycles or operational patterns that produce your monthly peaks, then design a curtailment strategy that does not interrupt operations. For qualifying loads, we handle enrollment in PJM Capacity Performance, Synchronized Reserve, or utility-administered demand response programs. We audit your bills for ratchet clause overcharges and power factor penalties, and we recommend power factor correction equipment where the ROI is clear.
Background reading
Additional context on this topic
External resource. Linked for additional context on the topic; not produced by Developments CS.
In depth
Common questions, answered
What is a demand charge and how does it work?
A demand charge bills you for the single highest fifteen-minute average kilowatt draw during the utility's billing period, measured against the demand schedule on your tariff. Some tariffs measure peak demand any time; others measure only during specified peak hours. A facility that runs at twenty kilowatts average but spikes to one hundred kilowatts for one fifteen-minute window pays for that one hundred kilowatt peak across the entire month. The cost is dollars per kilowatt, and the rate on commercial general service schedules in the Mid-Atlantic ranges from eight to twenty-five dollars per kilowatt per month. A single bad peak event can add thousands to a single bill.
What is a demand ratchet clause?
A demand ratchet clause locks in a minimum billed demand for the eleven months following a peak event, regardless of whether you ever reach that level again. If your tariff has a fifty-percent ratchet and you peak at two hundred kilowatts in July, your minimum billed demand is one hundred kilowatts for the next eleven months even if your actual peak drops to forty. Ratchet clauses appear on most large commercial schedules in BGE, PEPCO, and Delmarva territory. Many facility managers do not know they exist, do not know their effective ratchet floor, and pay the inflated minimum without contest. We audit every ratchet clause exposure on every account we manage.
What is demand response and how do I get paid for it?
Demand response programs pay you to reduce load on command during grid stress events. In PJM, which covers all our service territory, the largest programs are Capacity Performance and Synchronized Reserve. Capacity Performance pays a fixed monthly capacity payment plus an event-based payment when called, typically five to fifteen events per year of two to four hours each. A facility that can reliably shed five hundred kilowatts on notice can earn fifteen to forty thousand dollars per year in pure revenue, separate from any operational savings. Enrollment is administered through curtailment service providers; we handle the paperwork, baseline measurement, and event response on your behalf.
Related services
Often deployed alongside
Send us a bill. We will tell you what we see.
Fifteen minutes with one of your invoices is usually enough to see whether there is meaningful savings on the table.