A demand charge measures how fast your home pulls power, not how much it uses overall. It’s the difference between energy and power.
Energy (kilowatt-hours) is cumulative — the total electricity consumed over a billing period. Power (kilowatts) is instantaneous — how much you’re drawing at any given moment. Most residential bills charge only for energy. Demand charges bill for peak power too.
Under Duke Energy’s Residential Time-of-Use (RT) rate, your monthly bill includes two demand components:
- On-Peak Billing Demand: the highest 30-minute power draw during on-peak hours in the billing month
- Max Billing Demand: the highest 30-minute power draw across all hours in the billing month
That peak reading — even if it happened just once — sets your demand charge for the whole month.
Why EV chargers and demand charges don’t mix well
A Level 2 EV charger draws 7 to 10 kW continuously while charging. That’s a large residential load. Running it at the same time as your air conditioner and electric water heater can push your instantaneous draw to 15 kW or more. One 30-minute window where those appliances overlap is enough to lock in a high demand charge for the billing period.
The Flex Savings Option doesn’t have this problem. It charges only for kWh, at higher rates during three peak hours and lower rates the rest of the time. For most EV owners, FSO is the safer and simpler choice.
When you’re evaluating rate options
If you’re considering Duke Energy’s RT rate, ask yourself whether you can reliably prevent high-draw appliances from running at the same time. A smart EV charger with load-limiting features helps. A programmable water heater timer helps. If you’re not sure, start with the Flex Savings Option — it has no minimum commitment, so you can leave without penalty if the rates don’t work for your household.
Common questions
- Does the Duke Energy Flex Savings Option have a demand charge?
- No. The Flex Savings Option charges only for kilowatt-hours at time-varying rates — on-peak, off-peak, and discount tiers. There is no demand charge. Duke Energy's Residential Time-of-Use (RT) rate is the program that includes a demand component. This distinction is one of the main reasons most EV owners are better off on the Flex Savings Option.
- How does a demand charge affect EV owners on the RT rate?
- Significantly, if you're not careful. A Level 2 EV charger draws 7 to 10 kW. If it runs at the same time as your central AC (2 to 5 kW) and electric water heater (4 to 5 kW), your 30-minute peak demand can hit 15 to 20 kW. Under the RT rate, that single half-hour event sets your billing demand for the entire month. Your demand charge reflects your worst moment, not your average behavior.
- How do I avoid a high demand charge on the RT rate?
- Stagger high-draw appliances so they don't run simultaneously. A smart EV charger with load-sharing or power-management features can throttle charging to stay within available capacity rather than drawing at full output. Scheduling EV charging for overnight hours — when HVAC and water heater loads are low — is the most reliable approach. Some homeowners use a home energy management system to automate this, but deliberate scheduling handles most of the risk.