Electricity bill guide
Contract Demand exceeded: what it costs, and what to do next.
Your Maximum Demand went above your Contract Demand, also called sanctioned load. The same crossing can cost nothing extra in one state and a fifth of the month’s bill in another. Here is what it costs in 18 states, when it changes your Contract Demand, and how to decide your next step.
What happens when you exceed it
Three things can follow one crossing:
- This month’s bill goes up. Your tariff adds an excess-demand charge. One 15- or 30-minute interval is enough, because the meter keeps the month’s highest reading.
- The crossing may be counted. In several states, repeated crossings let the DISCOM raise your Contract Demand.
- You learn it late. The bill arrives weeks after the interval, when nobody remembers which loads overlapped.
What the same crossing costs in 18 states
Take a plant with a Contract Demand of 500 kVA that reaches 560 kVA for one interval, on HT supply at the 11 kV rate. That is 60 kVA, or 12%, above the line.
Same plant, same 60 kVA
One crossing costs ₹19,500 to ₹2,00,000
| State and category | Charge starts above | Cost of this crossing | How it works |
|---|---|---|---|
| Uttar Pradesh, HV-2 | 100% | ₹54,000 | ₹900 per excess kVA: ₹300 plus 200% |
| Gujarat, HTP-I | 100% | ₹33,300 | ₹555 per excess kVA |
| Tamil Nadu, HT-I | 100% | ₹72,960 | ₹1,216 per excess kVA, double the rate |
| Maharashtra, HT I(A) | 100% | ₹97,500 | ₹1,625 per excess kVA: ₹650 plus 150%. No load factor incentive that month |
| Rajasthan, HT-5 | 105% | 12% of the month’s fixed and energy charges | Both charges rise by the same percentage as the excess |
| Madhya Pradesh, HV-3.1 | 120% | ₹24,540, no penalty | ₹409 normal rate. 1.3 times from 120% to 130%, double above 130% |
| Delhi, industrial | 100% | ₹19,500 | ₹250 per excess kVA plus 30%. PPAC and surcharges rise with it |
| Karnataka, HT-2(a) | 100% | ₹42,000 | ₹700 per excess kVA, two times the rate |
| Haryana, HT | 110% | 20% of the month’s total charges for power | 20% above 110%, 25% above 115% |
| Punjab, Large Supply | 100% | ₹45,000 | ₹750 surcharge per excess kVA |
| Telangana, HT-I(A) | 100% | ₹60,000 | ₹1,000 per excess kVA. Above 120%, all energy costs 1.15 times |
| Andhra Pradesh, HT III(A) | 100% | ₹57,000 | ₹950 per excess kVA. Above 120%, the excess share of energy costs 1.5 times |
| West Bengal, HV 11 kV | 100% | ₹36,864 | ₹614.40 per excess kVA on the flat rate: ₹384 plus 60%. On time of day, ₹27,648 in normal hours and ₹34,560 in peak hours |
| Odisha, Large Industry | Peak hours 100%, other hours 120% | ₹30,000 in Peak hours. Other hours, no charge on it | ₹250 normal plus ₹250 penalty per excess kVA in Peak hours. Within 120% at other hours there is no charge, if Peak-hour demand stays within Contract Demand. Rule from 1 July 2026, after meter configuration |
| Chhattisgarh, HV-3 11 kV | 100% | ₹36,000 | ₹600 per excess kVA, 1.5 times the rate. The excess share of energy also costs 1.5 times: about ₹70,650 more on a 1,50,000 kVAh month. 2 times beyond 20% of Contract Demand |
| Jharkhand, HTS | 110% | ₹36,000 | ₹600 per excess kVA, 1.5 times the rate, counted from Contract Demand up. None up to 110%: a cliff |
| Uttarakhand, RTS-5 HT up to 1000 kVA | 100% | ₹49,200 | ₹820 per excess kVA, twice the rate |
| Himachal Pradesh, LIPS HT-1 | 100% | ₹45,000 | ₹750 per excess kVA, three times the rate |
Illustrative: charge on the 60 kVA only, at the 2026-27 rates on our state guides (Tamil Nadu: its current order; West Bengal: the 2025-26 order still in force). The rest of the demand charge also moves with MD, so the full change in your bill can differ. Rules differ by DISCOM and category and change with each tariff order. Check your own order and bill.
In Rajasthan and Haryana the charge reaches the whole month, not just the extra kVA. On ₹10,00,000 of fixed and energy charges, this crossing adds ₹1,20,000 in Rajasthan and ₹2,00,000 in Haryana. Haryana also has a cliff: a 500 kVA plant pays no surcharge at 550 kVA and the full 20% at 551 kVA.
The bill can move more than the table shows. On UP HV-2, a 400 kVA plant that normally peaks at 380 kVA and reaches 430 kVA once sees its demand charge go from ₹1,14,000 to ₹1,47,000: ₹33,000 more, for one interval. Work out your own month with the MD penalty calculator.
When crossings change your Contract Demand
The penalty ends with the month. A revised Contract Demand does not. These are the rules on our state guides:
| State | Trigger | What follows |
|---|---|---|
| Uttar Pradesh | At least 3 crossings in a financial year | The lowest of those months becomes the sanctioned load from the first billing cycle of the next year, with extra security deposit |
| Gujarat | 5% or more above, at least 4 times in a financial year | The DISCOM can raise Contract Demand |
| Maharashtra | More than 3 crossings in a calendar year | MSEDCL can raise it after 15 days’ notice |
| Delhi | Highest average MD over 4 consecutive months, April to March, is above the sanctioned load | Notice to raise the load at the yearly review, with a higher security deposit |
| Tamil Nadu, LT | Third occurrence in 12 months | Sanctioned demand is revised up to the recorded demand |
| Rajasthan, HT-3 | Above 125 kVA more than twice in a financial year | The connection moves to HT-5 |
| Jharkhand, LTIS | Above 100 kVA more than 3 times | The connection moves to HTS |
| Punjab | Repeatedly exceeding Contract Demand | PSPCL can act against the consumer, who is liable for any damage caused |
For other states and categories, check your supply code. One restart can count the same as a real rise in load, so keep your own count through the year.
What to do after a crossing
- Check the reading. Compare the MD on the bill with the DISCOM meter’s display and your own meter records. In UP, a photo of the display corrects a wrongly noted reading. Our bill check guide shows which lines to compare.
- Find the interval. Get the date and time the MD was set. Then look at what was running: a restart after a power cut, a shift start, a new machine or a seasonal load.
- Count this year’s crossings. Go through every bill from the start of the financial year and compare them with your state’s trigger above.
- Check power factor on a kVA tariff. 400 kW at a power factor of 0.85 draws about 471 kVA; at 0.98 it draws about 408 kVA. That gap alone can be the crossing. See how to improve power factor.
- Pull 12 months of MD. You need it to choose between the options below.
Raise Contract Demand, or control the peak?
| What 12 months of MD shows | Usually the better move |
|---|---|
| One spike, from a restart or an overlap | Control it and keep your Contract Demand. Stagger the starts |
| Spikes at the same hour, such as a shift start | Control it. Reschedule the overlap, then look at the MD again |
| Low power factor on a kVA tariff | Correct power factor first, then look at the MD again |
| Crossings in a season, normal months well below | Compare the penalties with the cost of a higher floor, using the method below |
| Real load growth, MD over the line most months | Apply to raise it, with a figure you chose, before repeated crossings bring a revision on the DISCOM’s terms |
Here is the one-spike case in numbers: an illustrative UP HV-2 plant at 11 kV with a Contract Demand of 400 kVA, normal months between 340 and 395 kVA, and one restart that reaches 430 kVA.
| That month | Leave it, CD 400 | Raise to CD 450 | Hold the spike, CD 400 |
|---|---|---|---|
| Maximum Demand | 430 kVA | 430 kVA | 395 kVA |
| Demand charge at ₹300 | ₹1,29,000 | ₹1,29,000 | ₹1,18,500 |
| Excess-demand charge | ₹18,000 | None | None |
| Other months | No change | No change | No change |
| Crossing counted | Yes | No | No |
| Total for the month | ₹1,47,000 | ₹1,29,000 | ₹1,18,500 |
Illustrative figures from the UPERC rate schedule for 2026-27. A higher Contract Demand also means an application and usually a higher security deposit, which this table leaves out.
Holding the spike saves more, ₹28,500 against ₹18,000, because it also lowers the normal demand charge. Raising Contract Demand costs nothing extra here, because every month stays above the new floor of 337.5 kVA.
How far you can raise it at no extra monthly cost
Most tariffs bill demand on the higher of MD and a share of Contract Demand. A higher Contract Demand therefore costs nothing extra in a month when MD stays above the new floor. To find the limit:
Lowest normal month’s MD ÷ your state’s floor share. With a lowest month of 340 kVA and a 75% floor: 340 ÷ 0.75 = about 453 kVA.
| Floor share | Where | Limit at 340 kVA |
|---|---|---|
| 75% | Uttar Pradesh, Rajasthan HT, Maharashtra HT, Jharkhand HT, Uttarakhand HT | 453 kVA |
| 80% | Punjab, Telangana HT, Andhra Pradesh HT, Odisha (against Peak-hour demand) | 425 kVA |
| 85% | Gujarat, West Bengal, Chhattisgarh HV, Himachal Pradesh (Contract Demand is also its ceiling) | 400 kVA |
| 90% | Tamil Nadu HT, Madhya Pradesh, Karnataka HT | 377 kVA |
| 100% | Delhi, Haryana HT | No free room |
Same plant, three Contract Demands
Too low, too high, and the room in between
CD 400 kVAToo low
₹13,59,900a year
₹18,000 of excess charge in July, and one crossing counted.
CD 450 kVALowest of the three
₹13,41,900a year
No crossing, and every month stays above the floor.
CD 500 kVAToo high
₹13,79,400a year
No crossing, but ₹37,500 billed for demand not drawn, in 7 months.
Holding the peak still beats all three. Keep July at 395 kVA under a Contract Demand of 400 kVA and the same year costs ₹13,31,400.
At 100%, every added kVA is paid every month. Going from 400 to 450 kVA adds ₹1,74,000 a year on Haryana HT at ₹290 per kVA, and ₹1,50,000 a year in Delhi at ₹250. A low-production month that falls under the floor costs extra everywhere, so use your real lowest month, and apply with your MD history in hand. The Contract Demand guide covers sizing in full.
A large increase can also change your supply. In Rajasthan, for example, HT-5 at 11 kV runs up to 2,500 kVA and needs 33 kV above that. Check your DISCOM’s limits before you apply.
How KONDUKTOR® EMS helps
KONDUKTOR® EMS reads the multifunction meters already on your panels and tracks demand against the Contract Demand you set for each meter.
- Running MD shows against Contract Demand live, and your team is warned while the interval is still building, with time to hold back a load.
- Month-by-month MD history records the date and time of each peak, so you can count crossings and see which panel set them.
- A Contract Demand optimizer reads 12 months of MD and suggests a Contract Demand with headroom, with the yearly saving in rupees.
- As part of your project, a Modbus I/O card can shed a chosen load automatically before the interval closes above the line.
Common questions
What happens if we exceed Contract Demand?+
The month’s bill carries an excess-demand charge, and in most states the charge starts at the first kVA above Contract Demand. The crossing can also count towards a higher Contract Demand. In Uttar Pradesh, three crossings in a financial year set a new sanctioned load for the next year. In Punjab, PSPCL can act against a consumer who keeps exceeding.
How much is the penalty for exceeding Contract Demand?+
It depends on the state. At 11 kV, each kVA above Contract Demand costs ₹900 in Uttar Pradesh, ₹555 on Gujarat HTP-I, ₹1,216 on Tamil Nadu HT-I, ₹1,625 on Maharashtra HT I(A), ₹700 on Karnataka HT-2(a), ₹750 of surcharge in Punjab, ₹614.40 on the West Bengal flat rate, ₹600 on Chhattisgarh HV-3, ₹600 on Jharkhand HTS above 110%, ₹820 on Uttarakhand RTS-5 and ₹750 on Himachal Pradesh HT-1, and ₹500 in Odisha in Peak hours. Rajasthan and Haryana instead raise the month’s whole charges: above 105% in Rajasthan by the same percentage as the excess, and above 110% in Haryana by 20% or 25%. Madhya Pradesh has no extra charge up to 120%.
Is there any tolerance above Contract Demand?+
In five of the 18 states we cover. Madhya Pradesh charges nothing extra up to 120% of Contract Demand. Haryana has no surcharge up to 110%. Rajasthan’s charge starts above 105%, and on HT-5 one half-hour within 110% in the month is not charged, with a limit of 120% from 10 pm to 6 am. Jharkhand has no penalty up to 110%, but above it all demand above Contract Demand costs 1.5 times. Odisha has none up to 120% outside Peak hours, if Peak-hour demand stays within Contract Demand. The others charge from the first kVA above Contract Demand.
Can the DISCOM raise our Contract Demand without our request?+
Yes, in several states, after repeated crossings. Uttar Pradesh uses the lowest of the crossing months after three crossings in a financial year. Gujarat allows it after four or more crossings of 5% or more in a financial year. Maharashtra allows it after more than three crossings in a calendar year, on 15 days’ notice. Delhi looks at the highest average over four consecutive months at its yearly review.
Is it cheaper to raise Contract Demand or pay the penalty?+
Often neither is the cheapest. A single spike from a restart is usually cheaper to prevent, because that also lowers the month’s normal demand charge. If real load has grown and MD crosses most months, raising it usually beats paying the penalty. Compare both from 12 months of MD for your own tariff.
Does a higher Contract Demand raise our monthly bill?+
Not always. On most tariffs you pay on the higher of MD and a share of Contract Demand, so a higher Contract Demand costs nothing extra in months when MD stays above the new floor. Divide your lowest normal month’s MD by the floor share to see how far that goes. In Delhi and on Haryana HT the fixed charge is on the full Contract Demand, so every added kVA is paid every month. Expect a higher security deposit too.
What if the MD on the bill looks wrong?+
Compare it with the DISCOM meter’s own display and with your own meter records, then raise it with the DISCOM and keep the proof. In Uttar Pradesh, a photo of the meter display corrects a wrongly noted reading. We also check the demand lines of your bill for free.
Can we stop a crossing while it is happening?+
Often, yes. MD is an average over the 15- or 30-minute interval, so a warning while the interval is still building leaves time to hold back a non-critical load. A live view of running demand against Contract Demand gives your team those minutes. A bill cannot, because it arrives weeks later.
Crossed it already? Send us the bill.
We check Maximum Demand, Contract Demand and the excess-demand line against your tariff, and tell you what the crossing cost, free.