One bad afternoon at your DCFC site can cost $20,000 over the next year. Most site owners don't find out this happened until the bill arrives.
The culprit - a tariff clause called "demand ratchet."
Definitions:
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DEMAND CHARGE - commercial bills add a $/kW charge on your highest 15-minute peak that month. $10-$30/kW is typical. This comes on top of energy consumption charges (i.e. $/kWh).
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LOAD FACTOR (LF) - average load divided by peak load. A site running flat out 24/7 has LF = 100%. This is highly hypothetical, as most DCFC sites run well below 50%. A new DCFC site, for example, with a 360 kW peak and modest traffic might sit at 5-15%. A charging site with low LF is specifically susceptible to demand charges, as one high peak can cause charges that will consume 80%-90% of the monthly electricity bill.
A ratchet clause adds a twist: this month's billed demand is the greater of (a) your actual peak, or (b) a fixed percentage of your HIGHEST peak in the past 11 months. Common floors are 50% to 95%. One coincident-arrival event - four cars plugging in at the same moment - sets a peak the ratchet then locks in for a year.
Worked example, new 360 kW DCFC site, say with two 180KW dual-port charging stalls:
- Normal monthly peak: 180 kW
- One-time spike event: 360 kW (4 cars simultaneously)
- Ratchet: 80% of past 12-month max
- Demand charge: $15/kW
- Energy charge: $0.12/kWh
- Load factor: 10% (early-stage site, still growing)
What this means?
- Without the spike: ~$70,000/year total bill.
- With the spike: ~$89,000/year, or an excess of $19,440 in annual costs.
That 15-minute event pins billed demand at 0.80 x 360 = 288 kW EVERY month for 11 months, even when only one car charged all day. At this load factor, demand charges go from ~46% to ~58% of the bill - the ratchet alone adds nearly a third of your annual electricity cost.
The math is brutal. The fix is not.
At evpower.ai we build real-time power-control algorithms that run INSIDE your site. When that fourth car plugs in, our controller instantly allocates available power across active sessions to maximize profitability by controlling demand-charges, all while maintaining an excellent driver experience, so that one unlucky afternoon never has to cause a bad fiscal year.