menu icon
Select Service Location
Select Service Location
Log in Make a payment

Choose Direct Energy

Direct Energy is dedicated to helping you choose the right energy solutions for your unique needs. Find the perfect fit with our electricity and natural gas plans today.

Learn more

A smarter, safer home

Home security, automation and efficiency at your fingertips. Protect your peace of mind with an exclusive offer from our partner Vivint.

 

Learn more

25 energy-efficient tips for lower electricity costs

Discover practical, energy-saving tips to reduce electricity costs and increase efficiency at home or business. Knowledge is power, literally!

 

Read article

Download the app

Get the Direct Energy app to easily pay your bill, manage your account, keep an eye on your usage, refer friends and more. 

 

Learn more

What you should know about demand charges as a small business owner

What is an electricity demand charge?

A demand charge is a fee on your electricity bill that reflects the highest amount of energy your business uses during a specific time period. It is set by your local Transmission and Distribution Service Provider (TDSP) to cover the cost of delivering electricity and is regulated by the Public Utility Commission of Texas (PUCT). Direct Energy includes this charge on your bill, as outlined in the TDSP’s tariff.

Why demand charges matter for your business

Unlike residential bills, business energy costs are based on 2 factors:
 

  1. How much electricity you use over time
  2. The highest amount you use at once, which is known as a demand charge



Demand charges are based on the highest rate of electricity your business uses within any 15-minute window during a billing cycle, often triggered when multiple large systems or pieces of equipment start up at the same time.

Follow these tips to help manage demand

Stagger system start-ups to avoid spikes

Use ENERGY STAR® equipment
for better efficiency

Right-size your tools to avoid
unnecessary power use

Understanding your bill

The demand charge is grouped with other TDSP delivery charges and appears as a single line item on your bill. Your peak demand for the billing period is also listed.

To learn more about how your TDSP determines your demand charge, visit the rates and tariffs section on the Public Utility Commission of Texas (PUCT) website.

Demand charge FAQs

Show all answers

Your TDSP may still apply demand charges until your electric meter is fully de-energized. Even if your business is mostly shut down, using electricity for just 15 minutes can set a new peak demand for the month.

Energy charges reflect the total amount of electricity your business uses over time, measured in kilowatt-hours (kWh). Demand charges are based on your highest rate of usage during any 15-minute window, measured in kilowatts (kW) or kilovolt-amperes (kVA). Think of it like driving: Energy is the total distance, and demand is your top speed.

The demand charge is based on the highest 15-minute interval of electricity your business uses during the billing cycle. This number is then multiplied by the rate in your TDSP’s tariff.

Have a question about a plan or need help placing an order?

Midwest and Northeast region: 1-800-826-8203

Hours: 8 a.m. - 5 p.m. ET (Mon-Fri)

Texas: 1-833-480-7839

Hours: 7 a.m. - 7 p.m. CT (Mon-Fri)