The formula to calculate the demand charge is:
\[ DC = MD_{15} \cdot R \]
Where:
Demand charge is a fee based on the highest level of electricity demand recorded during a specific period, typically a 15-minute interval. It is used by utility companies to cover the costs of maintaining the capacity to meet peak demand.
Let's say the maximum demand during any 15 minute period (MD15) is 50 kW, and the electricity rate (R) is $0.15 per kWh. Using the formula:
\[ DC = 50 \cdot 0.15 = 7.50 \text{ dollars per hour} \]
So, the demand charge (DC) is $7.50 per hour.