Peak Ledger

kW vs kWh on a commercial electric bill

kW is how hard you are drawing power. kWh is how much energy you used over time. Commercial bills often charge for both.

The difference

kWh = kW x hours. A bucket analogy helps: kW is how fast the tap runs; kWh is how much water ended up in the bucket.

Worked example

500 kW for 2 hours1,000 kWh
100 kW for 10 hours1,000 kWh

Same energy, very different peaks. On an energy-only line they cost the same. On a demand line the 500 kW case is billed five times as much demand as the 100 kW case.

Illustrative numbers, not a real rate: a demand charge of $15 per kW-month and an energy charge of $0.08 per kWh.

Energy: 1,000 kWh x $0.08$80
Demand if 500 kW is the monthly peak: 500 x $15$7,500
Demand if 100 kW is the monthly peak: 100 x $15$1,500

These are partial, illustrative lines for one month, not full bills.

Frequently asked questions

Which one is my demand charge based on?

kW, specifically your highest interval average in the billing month.

Which one is my energy charge based on?

kWh, your total energy used, often at a per-kWh rate.

Why do I see both on one bill?

Utilities charge for energy and for the capacity to deliver power at your peak.

Try it on your own numbers

Find your peaks free

All numbers on this page are illustrative, including the rate. They are not a real utility tariff. Your bill depends on your utility rate schedule; check it before acting. Peak Ledger gives estimates, not a utility bill or an engineering design.