For large volume business customers, how is Demand Charge quantity calculated?
I'm investigating an account where the demand charge quantity is reported as (roughly) 250 kVA and the customer is charged a dollar figure, per kVA, per month. However the bill for this period indicates that the "highest actual meter demand period is" roughly 75kVA on a particular date and time during that billing period.
- is the Demand Charge quantity set by the highest value in the last 12 months (or some other period)?
- is the Demand Charge quantity set by the contract?
- or is their another method to set that quantity?
If the customer reduces their demand, either by power factor correction or demand control measures, how is the Demand Charge quantity affected?