What Is a Demand Charge? What Is It Based On?

Demand Charge is the portion of the electricity bill charged in baht per kW based on the highest power demand recorded during the billing cycle, not on the number of units consumed. The September 2026 tariff announcements from the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA) still include a minimum charge clause that references the highest power demand over the trailing 12 months counting back to the current month.

The demand charge rates under the PEA's September 2026 tariff announcement are before adding the Ft charge (in Thai) and value-added tax (VAT). Other voltage tiers and MEA customers have their own separate rate tables.

This Month Used Less Electricity, but the Demand Charge Line Did Not Drop

A factory manager laid two months of electricity bills side by side. This month's unit count was lower than the previous month's, but the "demand charge" line had not decreased accordingly. This line is calculated from a different set of figures than the unit count, and that set of figures is also tied to the peak of previous months. Reading the bill correctly starts with knowing where the kW figure on the bill comes from.

What Does the Demand Charge Measure? When Does the Meter Record It?

Power demand is measured through a single meter as an average over 15 minutes, and the highest such average within the billing month becomes the kW figure on the bill — not an instantaneous reading. The period used to find the peak depends on the rate type: the normal rate counts the entire month, while the TOU rate counts only the On Peak period.

This same interval average is also the criterion used to classify business size, measured through a single meter, not by business type or building size. The MEA tariff announcement clearly states the method for finding the peak separately by rate type, while on the PEA side this can be seen from the Peak column heading in the TOU rate table of the tariff announcement, and the official electricity calculators of both utilities calculate in the same way. The result is that this rule for finding the peak can be used to read bills from both PEA and MEA.

The On Peak period of the TOU rate uses the same time window at both utilities — the hours specified in the announcement, Monday through Friday. Saturdays, Sundays, National Labour Day, and regular public holidays are Off Peak for the entire day.

The Normal Rate Uses the Peak of the Entire Month

Customers on the normal rate are charged a demand charge based on the highest average across the entire month, not an instantaneous reading. The period counted covers every day and every time of day within the billing cycle.

The normal rate for medium-sized businesses (Type 3.1) is open only to existing customers, while new customers are placed on the TOU rate (Type 3.2) on the PEA side. Existing customers on the PEA side are those already on this rate before the November 2015 billing month. On the MEA side, existing customers are those who were on that rate and using electricity before October 2000.

For this group of normal-rate customers, the effect on the bill is that whichever single period of the month has the highest interval average — whether it falls on a working day, a holiday, or late at night — determines the demand charge line for the entire month. The TOD rate for large businesses (Type 4.1) charges demand separately by time period, where the Partial period charges only the amount exceeding On Peak, and the Off Peak period is not charged for demand.

The TOU Rate Uses the Peak Only During the On Peak Period, and Off Peak Is Not Charged

Customers on the TOU rate are charged a demand charge based on the highest average occurring only during the On Peak period, not an instantaneous reading. A peak occurring during the Off Peak period is not charged as demand.

The TOU rate table has no demand charge for the Off Peak period, so interval averages occurring from late night through morning on working days, or on Saturdays and Sundays, do not enter this line, even if they are higher than the value occurring during the On Peak period. Meanwhile, load during the On Peak period on Monday through Friday is counted in full. The result is that TOU-rate factories with the same monthly peak can pay different amounts on this line if that peak occurs during different time periods.

How Does Demand Differ From the Energy Charge? Why Doesn't Using Fewer Units Reduce It?

The demand charge is calculated in baht per kW based on the peak of the billing cycle, while the energy charge is calculated in baht per unit (kWh) based on the total amount of electricity used during the month. As a result, total units can decrease while the peak remains the same, and the demand charge line is still calculated at the same value.

Total units for the month can decrease from running equipment fewer days or more lightly during some periods, while the peak depends on the single period of the month when the most machinery runs simultaneously. If that period still occurs within the month, the demand charge line is still calculated from the same figure. The minimum charge clause still references the highest power demand over the trailing 12 months counting back to the current month, so the bill does not drop in full immediately.

The monthly demand charge figures for the low voltage tier under the PEA tariff announcement — both the normal rate for medium-sized businesses (Type 3.1.3) and the TOU rate for medium and large businesses (Types 3.2.3 and 4.2.3, which charge only the On Peak period) — are shown in the short-answer table at the start of this article.

These demand charge rates do not yet include the Ft charge and value-added tax (VAT), and other voltage tiers have their own separate rates. The effect on the bill is that this line moves up and down with the kW figure of the peak, not with the number of units used.

What Is the Minimum Charge Over the Trailing 12 months? How Long Does a One-Time Spike Month Affect It?

The September 2026 tariff announcements from PEA and MEA set the minimum charge at not less than the announced proportion of the highest power demand over the trailing 12 months counting back to the current month. The result is that a month with a one-time spike in peak demand remains the base for the minimum charge until that month falls out of the trailing window.

This clause applies to customer types 3–5 for both PEA and MEA. The minimum charge acts as a floor for each month's bill, meaning the amount charged is not less than this threshold, even if that month's electricity use drops significantly.

The base of this threshold is the highest power demand for the minimum charge over the trailing 12 months counting back to the current month, not only the peak of the current month. When any month's peak spikes once, that value remains within the trailing window for every subsequent month until the window shifts past that month. The effect for the reader is that in a month when load has returned to normal, the floor of the bill is still calculated from the peak of the spike month.

If the spike month is the peak of the entire window, the floor of the bill can only decrease once that month drops out of the trailing window. Reducing the peak of the current month does not shift this floor. Meanwhile, a new month that spikes higher than before becomes the new base and starts its own window.

How Is kW Rounded on the Bill? Do MEA and PEA Write It Differently?

The MEA tariff announcement requires kW to be rounded to the nearest whole number, with an exact midpoint rounded up. The PEA tariff announcement does not specify a kW rounding rule.

The MEA tariff announcement states this rule in the rate tables for medium-sized businesses, large businesses, and specific business categories, while the PEA tariff announcement only has a rounding rule for reactive power (kvar), with no clause addressing kW rounding. The effect on MEA customers' bills is a rounding difference of less than one full kW per billing cycle, and the kW figure on the bill can be compared against the factory's own metering system using the announced rule.

PEA customers who see a fractional difference between the kW figure on the bill and their own measured value do not yet have a clause in the tariff announcement to reference for this. The more direct way to get an answer is to ask the electricity authority office that manages that customer account directly.