Certified Facility Manager (CFM) Practice Exam

The charge based on a business's highest rate of energy usage during a billing period is called the __________ charge.

1. service

2. demand

3. usage

4. capacity

The correct answer is: demand

The charge based on a business's highest rate of energy usage during a billing period is referred to as the demand charge. This charge is important because it reflects the maximum power that the business has used at any one time, typically measured in kilowatts (kW). Utilities charge this fee to ensure that they have the necessary infrastructure and capacity available to meet that peak demand. Monitoring demand is crucial for businesses to manage energy consumption and costs effectively, as exceeding certain thresholds can lead to higher tariffs. By understanding demand charges, facility managers can implement energy-saving measures, such as load-shifting or energy-efficient technologies, to reduce peak usage and ultimately lower overall energy costs.