Modeling On-peak Demand

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Modeling On-peak Demand

I have a utility that charges for demand pricing for both power supply (generation) and delivery. The demand components are:

Power Supply - $16/kW for on-peak demand (between 11:00am and 7:00pm M-F)
Deliver - $4/kW for maximum demand (any time during the month)

How do I model on-peak demand to be between 11:00-7:00 and maximum demand any time?

Paul Gilman


If I understand this demand charge structure correctly, you would model it in SAM as follows:

  1. On the Electricity Rates page, check Enable demand charges.
  2. In the Demand Rates by Month with Optional Tiers table, make sure the charge for all months is zero.
  3. In the Demand Rates by Time-of-use Period and/or Tiers table:
    • Set Number of entries to 2.
    • Use the first row of the table for the Power Supply rate: Set Period = 1, Tier = 2, Peak (kW) = 1e38, and Charge ($/kW) = 16.
    • Use the second row for the Deliver rate: Set Period = 2, Tier = 2, Peak (kW) = 1e38, and Charge ($/kW) = 4.
  4. In the Weekday matrix, use your mouse to select the entire matrix, and type a 2 on your keyboard.
  5. Select the hours between 11 am and 6 pm for all months and type a 1.
  6. In the Weekend matrix, select the entire matrix and type a 2.

The result should look like this:

Best regards,


Hi Paul,

Let me try again. Using an example for the data I provided before, assume the on-peak demand was 400kW and occurred at 2:00pm (between on-peak hours of 11:00am-7:00pm), and maximum demand was 600kW and occurred at 8:00pm (off-peak).

For the month, power supply demand charges of $16/kW, would be based on the "on-peak demand" of 400kW, and all the deliver demand charges,of $4/kW would be based on "maximum monthly demand of 600kW (regardless of when it occurred).

I don't think your suggested solution above does this.

Paul Gilman

In the demand charge structure I describe:

If the peak demand for a given month occurred at 2 pm, then the $16/kW rate would apply, so if the peak in the period 11 am to 7 pm was 400 kW for that month, the demand charge for that period would be 400 kW * $16/kW.

Then, if the peak in Period 2 (outside of the 11-7 period) was 600 kW, the $4/kW rate would apply, and the total demand charge for the month would be the sum of the two.

I think what you are saying is that the two periods overlap, so that the $4/kW rate might also apply to a demand peak that occurred in the 11-7 period.

I think you can model that by using the Demand Rate by Month with Optional Tiers for the "Deliver" rate (set the charge for all months to $4/kW), and defining the Demand Rates by Time of Use Period and/or Tiers as I describe above for the "Power Supply" rate, except set the charge for Period 2 to zero.

Using that method, if the peak demand happened to occur during the on-peak period, then both demand charge rates would apply.

Best regards,


Paul, I truly appreciate your help and your patience. Just to make sure:

There will always be both Power Supply demand and Delivery demand every month. For any month, there will be exactly one value for Power Supply demand and one value for Deliver demand. Power Supply demand is based on the "on-peak" demand which can occur on any weekday but must be between 11:00am and 7:00pm. Delivery demand is based on maximimum demand occurring any time during the month, including during on-peak weekday hours.

So, if I understand the second approach above, I would define "Demand Rate by Month with Optional Tiers" for the "Delivery" rate (set the charge for all months to $4/kW), and define the "Demand Rates by Time of Use Period and/or Tiers" as Period 1, Tier 2 to $16/kW and Period 2, Tier 2 to $0/kW. This would determine the demand values in my example to be:

Power Supply demand => 400kW @ $16/kW or $6400 for this month
Delivery demand => 600kW @ $4/kW or $2400 for this month
Total demand charges would be $8,800 for this month.


Paul Gilman

Yes, that is correct.

However, if the maximum demand of 600 kW occurred during the on-peak period (11-7 weekday), and the maximum demand in the off-peak period was of 400 kW, then the result would be:

Power Supply demand: 600 kW * $16/kW = $9600
Delivery demand: 600 kW * $4/kW = $2400
Total demand = $12,000

You can see these values in SAM after you run a simulation by going to Data Tables tab on the Results page: Expand the "Monthly Data" variables, and look at "Demand charge (TOU) with system" and "Demand charge (flat) with system."

Best regards,


Here's a variation on kerber's question... I have similarly structured demand rates. Only the time-of-use (TOU) element is seasonal, not hourly. I have a $3/kW distrib/delivery charge and an additional $11/kW (winter) or $14/kW (summer) demand charge.
Now, I believe I could enter these values two different ways:
1) $3/kW every month in the "by month" section, then $11/kW & $14/kW respectively in the "by TOU" section
2) Or, transpose these values. $11 & $14 in "by month," then $3/kW in "by TOU"

However, changing absolutely nothing else in the model, parametric simulation generates completely different NPV results.
What am I missing?

Paul Gilman

Dear Randy,

I think Method 1 is the way to model that demand rate structure. That will result in two demand charges per month: One calculated as $3/kW * peak usage per month for every month of the year, and one calculated as either $11/kW * peak usage per month or $14/kW * peak usage per month depending on the season.

I'm not sure I understand the parametric simulation you ran. I would expect Method 1 and Method 2 to give different NPV results.

Best regards,


Thanks Paul,
Shouldn't matter what the parametric analysis parameters are. If you have a moment, use whatever default values are in SAM - Tucson, I think. use a default PV array and battery and model a battery size range like Nick in his webinar. Use my rates, then transpose them - should get the same answer. Either way, it's $3+$11 winter versus $3+$14 summer for demand. Methinks.

Paul Gilman

Hi Randy,

Could you email me the file you set up for this? I want to make sure to use the same demand rate structure as you.


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