What is a demand charge on an electricity bill?

A network charge based on the single highest 30-minute average power draw recorded during the billing period, in dollars per kVA or kW per month — separate from the charge for total kilowatt-hours used.

Can I lower my demand charge without using less total electricity?

Yes. Staggering equipment that currently runs simultaneously — forklift chargers, refrigeration, dock equipment — spreads the same total load across more of the month, which is what actually lowers the single peak the charge is based on.

Does the demand charge reset every month or every year?

It is billed monthly, based on that month's peak, but the tariff rate itself (the dollar figure per kVA) is set annually and typically resets on 1 July.

Is the demand tariff the same for every network area?

No. Energex's Tariff 4000 rate above applies in its south-east Queensland network area. Every distribution network operator sets its own demand tariff schedule, so confirm the actual rate with your retailer or network operator for your connection.

Why one half-hour sets your whole electricity bill

A warehouse can use exactly the same total electricity two months running and still get a much bigger bill in the second one. The reason is almost never the total kWh line — it is the demand charge, and it is set by the single highest 30-minute period of power draw in the whole billing cycle.

Last updated 2026-08-24

The mechanic nobody explains on the bill itself

Most people read an electricity bill as a story about total consumption: more kilowatt-hours, bigger bill. For a large site, that is only half the story. Network operators also charge a demand component, billed in dollars per kVA (or kW) per month, and it is set by the single highest 30-minute average power draw recorded anywhere in the billing period — not by how much energy you used across the whole month.

That means a site that runs lean all month and then, for one half-hour, has forklift chargers, refrigeration compressors, dock levellers and air conditioning all drawing power at once, gets charged the demand rate for that one half-hour, applied to the entire month. Every other half-hour in the billing cycle is irrelevant to that line item.

What it actually costs

Energex's default large-business demand tariff for 2025–26, Tariff 4000, charges $8.087 per kVA per month, based on the single highest 30-minute demand measured in the billing period. A site that peaks at 200kVA for one half-hour is billed on 200kVA for the whole month, whether or not it ever comes close to that figure again.

An alternative structure, Tariff 92400, splits the same idea into time bands: $6.763/kVA/month for demand recorded during the weekday peak window (5–8pm), $4.396/kVA/month for shoulder periods, and $1.279/kW/month for anytime demand. The logic is the same either way — the network is sized to handle the peak load every customer might place on it simultaneously, and the tariff recovers that cost from whoever actually creates the peak.

Industry estimates put demand charges at somewhere between 30 and 50 percent of the network component of a commercial or industrial power bill — that figure comes from an energy broker's commentary rather than a network operator's own statistic, so treat it as indicative of scale rather than a number to budget against precisely.

Why this catches warehouses and cold stores specifically

A distribution centre or cold storage facility is a near-ideal way to accidentally trigger a demand peak, because so much of its equipment cycles independently: refrigeration compressors cut in and out on thermostat control, forklift chargers switch on in a batch at shift change, and dock equipment runs in short, unpredictable bursts. None of that is coordinated to avoid overlapping, so the odds of several loads landing in the same half-hour are high — and it only has to happen once in the whole month.

This is also why demand exposure is not the same question as general energy cost management. A site can be genuinely efficient on total kWh and still carry a large demand charge, because efficiency and peak coincidence are different problems with different fixes.

What actually moves the number

Staggering big simultaneous loads is the first lever — running forklift chargers on a delay rather than all at shift-change, or pre-cooling refrigeration ahead of a known peak window rather than letting the compressor catch up during it. None of that reduces total energy use; it only spreads it so no single half-hour spikes.

A second lever is shifting away from simultaneous electric forklift charging toward staggered or overnight charging, since a fleet plugging in together at shift change is a common, avoidable source of a demand spike. A third, more capital-intensive lever is battery storage discharging into the site during a known peak window, covered separately in this silo.

Demand is billed on the single highest 30-minute average in the month, not total usage
Energex Tariff 4000 (2025–26): $8.087/kVA/month on that one peak
Tariff 92400 splits the same charge into peak, shoulder and anytime bands
Staggering simultaneous loads is the cheapest way to lower it

Checking your own exposure

Your bill or your retailer portal will show a demand or kVA figure, usually as its own line separate from the energy charge. If that figure looks high relative to your average load, the fix is rarely more efficient equipment — it is usually a scheduling problem, and it is worth walking the site at the times equipment typically overlaps (shift changes, defrost cycles, cool mornings when heating and lighting run together) before assuming anything needs replacing.

Ask your retailer or network operator which tariff structure and dollar rate actually applies to your connection and network area — Energex's rates above are one distribution network's current figures, and every network operator publishes its own demand tariff schedule that resets each 1 July.

Demand exposure is also worth revisiting around peak season capacity planning, since a site running extra shifts or extra refrigeration ahead of a busy period is exactly when a new peak tends to get set. Where scheduling alone cannot flatten the peak, battery storage and, for a site with the roof for it, rooftop solar paired with storage are the next levers worth pricing.

Common questions

What is a demand charge on an electricity bill?: A network charge based on the single highest 30-minute average power draw recorded during the billing period, in dollars per kVA or kW per month — separate from the charge for total kilowatt-hours used.
Can I lower my demand charge without using less total electricity?: Yes. Staggering equipment that currently runs simultaneously — forklift chargers, refrigeration, dock equipment — spreads the same total load across more of the month, which is what actually lowers the single peak the charge is based on.
Does the demand charge reset every month or every year?: It is billed monthly, based on that month's peak, but the tariff rate itself (the dollar figure per kVA) is set annually and typically resets on 1 July.
Is the demand tariff the same for every network area?: No. Energex's Tariff 4000 rate above applies in its south-east Queensland network area. Every distribution network operator sets its own demand tariff schedule, so confirm the actual rate with your retailer or network operator for your connection.

Sources

Leading Edge Energy — Energex Tariff 92400 vs 4000: Big Savings for Large Energy Users — States the Energex Tariff 4000 and 92400 demand rates for 2025–26. Retrieved from an energy broker's summary of the tariff, not the primary Energex schedule.

Part of our guide to energy and gas costs for warehouses.