Simply put, they are like a penalty commercial or non-residential customers must pay for exceeding a brief electrical threshold. The tricky thing about it is that demand charges are based on the highest amount of electricity a customer used in a short 15 minute interval during the billing cycle. This means that for many commercial users, the cost of their electricity bill is determined by just mere moments of their usage but accounts for up to 70% of the entire bill. By being able to track usage and know when to not use peaked energy, customers can avoid this up-charge and dramatically lower their bills.