If you've been waiting for utilities to make demand charges go away, 2026 has an uncomfortable answer: they aren't disappearing — they're being rebuilt into new shapes. Across the country, and most visibly in California, utilities are replacing the traditional per-kW demand charge on commercial EV rates with subscription tiers, capacity reservations, and overage penalties. The label on the line item is changing. The thing it charges you for — your peak power draw — is not.
For any organization running or planning EV charging, that distinction is the whole game. Here's what's actually shifting, and why the strategy that beats it is the same one that always has.
The 2026 Shift: From Demand Charges to Subscriptions
California's big three investor-owned utilities are each rewriting how commercial EV charging gets billed, and they're not moving in the same direction:
- PG&E — its Business EV rate (BEV1/BEV2) replaces the traditional demand charge with a subscription-based kW allocation — in PG&E's own words, “the kW subscription replaces a demand charge.” BEV2 covers installations of 100 kW and up (subscribed in 50 kW blocks), including public fast-charging sites.
- SDG&E — its Electric Vehicle High Power (EV-HP) rate uses a subscription model in place of demand charges, where customers select a maximum capacity in 25 kW increments and must stay below it to avoid overage cost.
- Southern California Edison — its commercial EV rates (EV-TOU-7/8/9) remain energy-only, with no demand charges, until the end of 2029, with demand charges expected to return beginning January 1, 2030.
Three utilities, one state, three different rate philosophies — and a fourth model (classic per-kW demand charges) still in force almost everywhere else. That fragmentation is the real headline: there is no longer one "demand charge" to plan around. These aren't proposals — they're published, in-effect rates; the California Public Utilities Commission summarizes the commercial EV rate landscape across all three utilities.
The common thread: subscription tiers, capacity reservations, overage penalties, and classic demand charges are all just different ways of pricing the same thing — how high your power draw spikes. Reduce the spike and you win under every one of them.
Why the Cost Driver Hasn't Changed
Whatever it's called, the reason utilities meter peak power is physics, not policy: the grid has to be built to serve your highest instantaneous demand, even if you only hit it for one 15-minute window a month. EV chargers — especially DC fast chargers — are the most aggressive peak-setters a commercial site can add. A single 150 kW charger can redefine a facility's peak the moment a session begins.
And demand-related costs aren't a rounding error. Industry analysis, including work by the Transportation Energy Institute, has found that demand charges can account for up to roughly 74% of the electricity bill at some commercial EV charging sites — more than the energy itself.
Same peak, three billing structures
Under a demand charge, a lower peak means a smaller bill. Under a subscription, a lower peak lets you subscribe to a smaller, cheaper tier — and stay inside it. The optimization target never moved.
This Isn't Only a California Story
Rate redesign is spreading because every utility is wrestling with the same low-load-factor problem EV charging creates. A few signals worth watching:
- Massachusetts — National Grid's commercial EV program can reduce demand-related costs by up to 70% for qualifying customers, an example of a utility discounting rather than restructuring.
- Bidirectional charging is arriving — as V2G- and V2B-capable vehicles reach the market, using EV batteries to shave a building's peak (vehicle-to-building) is moving from pilot to practice, adding a new demand-reduction lever.
- Even across the border, Canada's Ontario Energy Board introduced a dedicated EV charging rate in 2026 that cuts transmission costs for qualifying DC fast-charging stations — another sign regulators are rebuilding, not removing, the way peak power is priced.
What this means for you: if you operate in more than one utility territory, you now face several different rate structures at once. A single peak-management approach that works regardless of the billing model is no longer a nice-to-have — it's how you keep costs predictable across a portfolio.
What to Do About It
The response to a moving target isn't to chase each new rate — it's to control the one variable every rate keys off of. Two techniques do that, and they work together:
1. Peak Shaving
Peak shaving trims the top off a demand spike at the moment it happens, so the peak never registers — whether that peak would trigger a demand charge, blow past a subscription tier, or set a ratchet.
2. Load Management
Load management is the automation that makes peak shaving continuous: software reads total building demand in real time, forecasts the interval, and shapes EV charging output to hold the site under its target — no staff intervention, no drivers turned away.
This Is What Energy Guardian Does
Energy Guardian is EVready's load management platform built for exactly this problem. It continuously reads total building load, forecasts interval demand, and shapes EV charging to keep the facility under whatever ceiling matters — a demand-charge threshold, a subscription tier, or a ratchet floor. Because it's network-agnostic, it manages energy cost regardless of charger brand or which rate structure your utility lands on. Sites typically see a 35–55% reduction in EV-related demand charges with no reduction in charging availability.
Berger Chevrolet · Grand Rapids, Michigan
Over a single billing period, Energy Guardian managed the dealership's charger load against its base building consumption. Without intervention, the site would have set a peak of 149.8 kW; Guardian held the actual peak to 116.9 kW — cutting its single largest demand event by roughly 75%, while intervening in just 7.1% of the period's intervals and turning away no charging sessions.
Common Questions
Are demand charges being eliminated for EV charging?
Not eliminated — restructured. In California, utilities like PG&E and SDG&E are replacing traditional demand charges on commercial EV rates with subscription-based models, where a site reserves a block of kW capacity and pays overage penalties for exceeding it. Southern California Edison's commercial EV rates remain energy-only with no demand charges until the end of 2029, with demand charges expected to return beginning January 1, 2030. In every case the cost is still driven by your peak power draw, so managing that peak remains the core lever.
What is a subscription-based EV charging rate?
A subscription-based rate replaces a per-kW demand charge with a fixed monthly fee for a reserved block of power capacity, typically selected in increments such as 25 kW. As long as the site stays within its subscribed capacity it pays the flat subscription; exceeding it triggers overage charges. It smooths billing month to month, but it still rewards keeping your peak demand below the subscribed level — which is exactly what load management does.
How much of a commercial EV charging bill comes from demand charges?
At many commercial EV charging sites, demand charges are the single largest line item. Industry analysis, including work by the Transportation Energy Institute, has found demand charges can account for up to roughly 74% of the electricity bill at some EV charging sites — more than the cost of the energy consumed. That is why reducing peak kW, not just total kWh, is where the savings are.
Does load management still help under the new rate structures?
Yes — arguably more than before. Whether a utility bills a classic per-kW demand charge, a capacity subscription with overage penalties, or a time-of-use demand rate, the common denominator is your site's peak power draw. Active load management holds that peak down in real time, so it protects you across all three structures. As rate designs multiply, a peak-management platform is the hedge that works regardless of which model your utility adopts.
Rate structures are changing faster than most operators can track. EVready's Playbook reads your specific utility tariff — demand charge, subscription, or ratchet — and designs Energy Guardian load management to keep your peak down no matter how the rate is written. Learn how Energy Guardian works →