What is Demand?
Demand is a term to describe how much electricity is used at any given moment. Most businesses have a meter that tracks and records the highest 30-minute level of electricity demand for each billing period. Demand is measured in kilowatts (kW), while the total amount of electricity used is measured in kilowatt-hours (kWh).
Let's compare electricity use between two customers, as an example. Both customers use the same amount of kilowatt hours (kWh) - 20,000 kWh - over the course of a month. The first customer uses a steady amount of electricity over the 30-day period while the second customer uses much of the 20,000 kWh in bursts over a few hours per day or a few days of the month. Although both customers used the same amount of electricity, the second customer would be charged more for placing greater demand on the system during the short periods of time when their electrical use peaked.