Energy is the largest recurring cost in a charging business, and what you pay for it is set by a state regulator rather than by a market. Most states now publish a separate tariff category for EV charging, generally more favourable than commercial rates. Which category you land in, and what it includes beyond the per-unit rate, is worth more attention than most operators give it.
Read four things, not one
The headline rate per unit is the least interesting number in a tariff order. Four components together determine your landed cost.
| Component | What it is | Why it matters |
|---|---|---|
| Energy charge | Rate per kWh consumed | Scales with usage — the number everyone quotes |
| Demand charge | Charged on sanctioned or maximum demand | Does not scale with usage; brutal on a low-utilisation site |
| Time-of-day multipliers | Peak / off-peak adjustment | Determines whether an off-peak retail discount is affordable |
| Duties and surcharges | Electricity duty, cross-subsidy, fuel adjustment | Frequently ignored and frequently material |
The demand charge is the one that surprises operators. It is levied on capacity, not consumption, so a 100kW sanction sitting mostly idle carries the same monthly charge as one running flat out. On a young site, demand charges routinely exceed energy charges, and dividing the total by the units actually delivered gives a landed cost per kWh far above the headline rate.
Where to look
The operative document is the current tariff order issued by your state electricity regulatory commission, not the DisCom’s summary page and not a news article about it. Orders are revised, usually annually, and the EV category has been moving in most states. Read the one in force, check its effective dates, and re-check at each revision.
Questions worth asking your DisCom
- 01Which tariff category applies to a public charging station at this address, and under which clause?
- 02Is there a separate category for captive or fleet charging, and would our use qualify?
- 03How is demand charge assessed — on sanctioned load, on recorded maximum demand, or the higher of the two?
- 04Are time-of-day multipliers applicable to this category, and what are the current window definitions?
- 05What is required for a separate meter and connection for the charging load, and what is the timeline?
Get the answers in writing. Verbal assurances from a local office do not survive a billing dispute, and the third question in particular has cost operators significant money when the answer turned out to be different from what they assumed.