Most small producers read their electricity bill as a per-kWh number and stop there. Above a certain size threshold, that's the wrong line to be watching — the demand charge, billed on your single highest interval of peak draw for the entire month, is often the larger and more controllable cost.
How a demand charge actually works
A utility meter doesn't just record total energy used; on commercial and industrial accounts, it also records the highest average power draw over a short interval — usually 15 minutes — at any point in the billing period. That one number, not your total consumption, sets the demand charge for the entire month. In some markets, that threshold sits as low as 50 kW of peak demand; in others, the demand charge applies to a small commercial account from the very first kilowatt.
The rate itself is not small. Depending on jurisdiction, a demand charge can run in the range of $4 to $14 per kilowatt of peak demand — applied once, against your single worst quarter-hour, regardless of how efficiently you ran every other hour of the month.
Why breweries and distilleries are exposed
A brewhouse, a glycol chiller, and a walk-in compressor rarely need to run at the same instant — but if their control logic (or the lack of it) lets them start up together even once, that coincidence sets your bill for the next thirty days. This is not a consumption problem; it's a scheduling problem, and it is free to fix.
The lever that costs nothing to pull
- Stagger startup sequences. A five-minute delay between the mash pump, the chiller compressor, and the walk-in cycling on is often enough to avoid a coincident peak.
- Move discretionary load off-peak. CIP cycles, ice-bank building for glycol, and non-time-sensitive refrigeration defrost cycles can often run overnight.
- Watch the interval, not just the total. A sub-meter with 15-minute logging shows you exactly which combination of equipment is setting your peak — information your monthly utility bill will never show you.
When it's worth spending money
For a plant with a genuinely large, unavoidable peak — say, a bottling line that must run its full compressed-air load at once — a soft-start on the largest motor or a small battery buffer for peak shaving can pay back inside two to three years purely from demand-charge avoidance. But that capital spend only makes sense after the free scheduling fixes have already been tried and the peak still won't move.