Maximum Demand penalty: one spike, billed all month.

What Maximum Demand actually is

The DISCOM meter at your incomer averages your load over short intervals — 15 or 30 minutes, depending on your tariff. Maximum Demand (MD) is the highest of those averages in the billing month. Most HT and HV connections are billed MD in kVA; some tariffs bill it in kW.

MD is not the instant peak. A motor starting for a few seconds barely moves a 30-minute average. What moves it is sustained overlap: a compressor, a furnace and a press line all running hard through the same half hour.

Depending on the meter and the tariff, the interval is either fixed to the clock (10:00–10:30, 10:30–11:00 and so on) or sliding, recalculated every few minutes. With a sliding window there is no safe moment to start a heavy load — any 30-minute stretch can become the month’s MD.

Contract Demand: the line you agreed not to cross

Contract Demand (CD) is the load sanctioned in your supply agreement. You pay a fixed charge on it every month, whether you use it or not. In Uttar Pradesh, for example, the fixed charge is billed on the higher of your actual MD or 75% of your Contract Demand.

MD below Contract Demand is normal. MD above it is where the penalty starts.

What crossing Contract Demand costs

Every kVA above Contract Demand attracts an excess-demand charge — in many tariffs, at twice the normal demand rate. One interval sets it, and it stays on that month’s bill.

Take an illustrative plant with a Contract Demand of 500 kVA that normally peaks around 470 kVA. One afternoon, after a short power cut, the compressors, a furnace and a press line restart together. That half hour averages 540 kVA.

Illustrative figures. Demand rates, the excess-demand multiplier and the interval length differ by state, DISCOM and consumer category — check your tariff order and bill. Work out your own month with the MD penalty calculator.

The other 29 days at 470 kVA do not average it down. One half hour, on one afternoon, sets the demand line for the month.

Why the bill is too late to fix it

You see MD once a month, on the bill. By then the interval that set it is weeks old, and nobody remembers which loads overlapped. A diary reading once a shift cannot catch it either: the spike can come and go between two rounds.

On a kVA tariff, MD also rises with poor power factor. 400 kW at a power factor of 0.85 draws about 471 kVA; the same 400 kW at 0.98 draws about 408 kVA. Low power factor eats into your Contract Demand headroom without a single extra unit of production.

How factories keep MD under control

• Stagger large starts. Bring compressors, furnaces, chillers and big motors back one at a time after a break, a shift change or a power cut, a few minutes apart.
• Watch the running demand, not the bill. If the current interval is heading past Contract Demand, holding back one non-critical load for a few minutes is often enough.
• Keep power factor close to 1. On a kVA tariff, every point of power factor gives back demand headroom.
• Right-size Contract Demand. Review 12 months of MD. If it sits well below Contract Demand every month, you may be paying fixed charges on unused capacity; if it keeps crowding Contract Demand, a revision may cost less than repeated penalties. Check your DISCOM’s rules on how often it can be changed.

How KONDUKTOR® EMS helps

KONDUKTOR® EMS reads the multifunction meters already on your panels and works out running MD live — on the same 15- or 30-minute interval as your tariff — against the Contract Demand you set for each meter.

• It warns your team while the interval is still building toward Contract Demand, so there is time to hold back a load.
• It records when each meter peaked, so you know which panel set the month’s MD, and why.
• Month-by-month MD history, coloured against Contract Demand, shows a creeping problem months before it becomes a penalty — and gives you the numbers for a Contract Demand revision.