Energy and capacity are billed separately
Under the GDMTH tariff you pay for two different things. Energy is what you consumed, measured in kilowatt-hours, and it is billed at three prices depending on the time of day: off-peak, mid-peak and peak. Capacity is the maximum demand you registered, measured in kilowatts, and it is billed even if that maximum lasted fifteen minutes.
That second part is the one that surprises people. It does not matter how long you sustained the peak: what matters is that it happened. A simultaneous startup on a Tuesday at seven in the morning can set the capacity and distribution charges for the next thirty days.
It is also the part you can control without changing your process, and the one almost nobody reviews.
The calculation worth doing
Take your bill and add up the capacity and distribution items. Divide by the bill total. That percentage is the weight of your demand charge, and it is the number that decides the conversation.
Below 15 %, your problem is energy: tariff, operating schedule, efficiency, perhaps generation. Storage has nowhere to get the savings from.
Above 25 %, your problem is capacity, and that is where storage starts to have a case. A battery bank charges during off-peak hours and discharges at peak: it cuts the price of energy and the billable peak with the same asset.
Between 15 and 25 % the answer depends on your profile, and that one does require metering to be answered properly.
Before storage, there are two cheaper things
The first is your contracted demand. If your measured demand is consistently well below your contracted demand, you are paying for capacity you do not use. Adjusting the contract is paperwork, not construction, and it lowers the bill the following month.
The second is your power factor. If your bill shows a penalty, you are already paying for something that is corrected with a properly sized bank. And "properly sized" means based on the measured harmonic spectrum — installing capacitors without measuring harmonics is the most common way to spend money making the problem worse.
Both cost a fraction of a storage project and are solved first. If someone proposes a BESS without having reviewed those two points, a conversation is missing.
What it takes to answer the question properly
Twelve months of billing, not one. The weight of the demand charge varies with the season and the production cycle, and a single month leads to the wrong conclusions.
And then, the measured load profile: what time your peak occurs, how long it lasts, and what load causes it. That is not on any bill, and it is what decides how the solution is sized.
In an initial review, with your bills on screen, we tell you which of the three ranges you fall in and what we would expect to find when we measure. If the numbers do not work, we tell you that too.
Capacity plus distribution, divided by your bill total. Above 25 %, storage has a case; below 15 %, your problem is something else.
