In the world of electrical engineering and energy management, most people focus on the obvious metric: kilowatt-hours (kWh) . After all, kWh measures total consumption, and it’s the line item that fluctuates with every light switch flipped and motor started.

However, lurking behind the scenes is a more subtle, often misunderstood, and financially devastating parameter: . While kWh measures quantity of energy used, Maximum Demand measures the rate of that usage. And as any facility manager who has opened a commercial electricity bill knows, MD can account for 30–50% of the total charges—sometimes more than the energy itself.

[ \textDemand Cost = \textMD (kW or kVA) \times \textTariff Rate , ($/kW) ]