Connected Load vs Maximum Demand: What TNB Bills

A factory with 2,000 kW of connected load rarely draws 2,000 kW. Its meter might record 800 kW as the month's highest half-hour average, and that 800 kW is what TNB bills. The gap between connected load vs maximum demand is where most sizing mistakes and most billing surprises live. One number is arithmetic on nameplates. The other is a measurement taken by the meter on your incoming supply, and under the RP4 tariff structure it carries a large share of your monthly cost.

What is connected load?

Connected load is the sum of the nameplate ratings of every piece of equipment fed by a supply, expressed in kW or kVA. Add up every motor, chiller compressor, air handling unit, oven, lift, lighting circuit and socket outlet allowance, and you have it.

It is a paper figure, and it assumes something that never happens: that all of it runs at full rated output at the same instant. Consultants use connected load for the supply application, for transformer and cable sizing, and for submissions to Suruhanjaya Tenaga. It only changes when equipment is physically added or removed.

What is maximum demand?

Maximum demand (MD) is the highest average power your site draws over a single 30-minute interval during the billing month. The meter slices the month into half-hour blocks, works out the average kW in each block, and keeps the largest one. That single value sets the demand charge for the whole month.

Two consequences follow from the 30-minute averaging. A two-second motor inrush does not set your MD, because it barely moves a half-hour average. A chiller, an air compressor and a production line that all run together for 40 minutes absolutely does. MD is about coincidence and duration, not about spikes. The mechanics of how the interval is calculated are covered in more detail in our guide on how to calculate maximum demand.

If you are on a Time-of-Use tariff, timing matters as well. Under RP4 the peak window is 2:00pm to 10:00pm on weekdays. Demand recorded outside that window (10pm to 2pm weekdays, all weekends and selected public holidays) is not charged, so an off-peak peak costs you nothing on the demand line.

Connected load vs maximum demand: what the demand factor tells you

The demand factor links the two figures: demand factor = maximum demand divided by connected load. It is dimensionless and in any real facility it is well below 1.

The reason is diversity. Equipment duty-cycles, so compressors and chillers unload or shut off on their own thermostats. Equipment operates in stages, so the standby pump is standby. And equipment runs part-loaded, so a 75 kW motor driving a fan at 60 percent speed is not drawing 75 kW. Stack those three effects across a few hundred assets and the coincident peak lands far below the nameplate total.

Do not confuse demand factor with load factor. Load factor is average demand divided by peak demand, and it tells you how flat your consumption profile is. Demand factor tells you how much of your installed capacity you actually call on at once. A site can have a low demand factor and a poor load factor at the same time, which usually means a spiky operation on an oversized installation.

Worked example: 2,000 kW connected, 800 kW recorded

Take that factory. Connected load 2,000 kW, recorded MD 800 kW, so the demand factor is 0.4. (The figures are illustrative, chosen to be arithmetically clean.)

On the Medium Voltage General tariff the demand charges are RM29.43/kW capacity plus RM59.84/kW network, RM89.27/kW/month in total. That gives 800 x RM89.27 = RM71,416 per month, or roughly RM857,000 a year, before a single kWh of energy charge, the retail charge or AFA. On Medium Voltage ToU the combined rate is RM97.06/kW, which puts the same 800 kW peak at RM77,648 a month.

Now bill the same site on connected load instead: 2,000 x RM89.27 = RM178,540 a month. That is the commercial weight of the distinction. It also works the other way. Shaving 80 kW off the peak, ten percent, is worth RM7,142 a month and about RM85,700 a year at the General rate. Our article on cutting TNB maximum demand charges covers the practical methods, and you can run your own figures through the maximum demand calculator.

Note that this per-kW billing applies to Medium and High Voltage supplies. For Low Voltage non-domestic accounts under RP4, capacity and network are charged per kWh rather than per kW, so there is no separate MD charge on the bill. Connected load still governs your supply and transformer sizing at LV, but it does not translate into a demand line. Current rates for every category are published in the myTNB tariff schedule and on the TNB commercial and industrial pricing page.

Why does TNB bill maximum demand instead of connected load?

Because the network has to be sized for what you actually pull at once, not for what you could theoretically pull. Transformers, feeders and generation capacity are reserved against your coincident peak, and the capacity and network charges recover the cost of holding that reserve for you.

RP4 sharpened this. Medium Voltage energy rates came down to roughly 29 to 31 sen/kWh, which moved a bigger share of the bill onto the per-kW components. A site that reduces kWh but leaves its peak untouched now sees less benefit than it would have under the old letter categories. Efficiency work that does not change the shape of the load curve leaves the largest fixed cost intact.

Where connected load still matters

Connected load has not stopped being useful. It governs transformer capacity, generator sizing, incoming cable and switchgear ratings, and protection coordination. Size those on today's measured MD and you will be short the first time the site restarts after an outage, when every chiller, pump and compressor comes back together and the demand factor briefly approaches 1. Standby generators in particular have to cope with starting kVA and sequential restart, not with a comfortable monthly average.

The practical rule: size the infrastructure on connected load with a sensible diversity allowance, and manage the bill on maximum demand.

Why adding equipment doesn't raise the bill in a straight line

Add a 100 kW chiller and connected load rises by exactly 100 kW. What happens to MD depends entirely on when that chiller runs. If it runs at 3am, it adds kWh and nothing else, and on ToU it sits in the off-peak window where demand is not charged at all. If it runs during the half hour that already holds your monthly peak, the full 100 kW lands on the demand charge, about RM8,927 a month at the General rate.

The reverse trap is more common. Three 50 kW compressors that used to start in a staggered sequence get re-commissioned to start together after a control change. Connected load is unchanged. Coincident demand rises 150 kW, and the bill rises around RM13,390 a month. Nobody bought anything.

Power factor sits alongside this rather than inside it. MD is billed in kW, so correcting power factor does not reduce the demand charge directly. It does avoid the surcharge that applies below 0.85 for supplies under 132 kV, and it relieves loading on your transformer and cables.

How to work out your own demand factor

Sum the nameplate ratings from your single line diagram and asset register to get connected load. Take the recorded MD in kW from your latest TNB bill. Divide the second by the first. If the answer is under about 0.3, your installation is carrying capacity you are paying to maintain and may be able to redeploy. If it is above 0.7, you have little headroom and any new load is likely to hit the demand charge directly.

The more useful step comes next: find out which loads are actually inside the peak half hour. That needs interval data, not monthly totals. CobiNeural tracks maximum demand as a live KPI against the current 30-minute window, shows which circuits are contributing, and can fire a WhatsApp or email alert before the interval closes so an operator still has time to shed or defer something. It runs standalone or as an overlay on an existing BMS, PLC or SCADA installation, and the same data feeds EECA and ISO 50001 reporting.

If you want a second opinion on the numbers, send us a recent TNB bill and, if you have it, a month of interval data. We will work out your demand factor, show you where the monthly peak is being set, and tell you what it is realistically worth to move it. Start at request a demo.