Answer Posted / k.prakashchandra

Contract demand is based on demand factor which to be
assessed or obtained from a similar industry.Once you enter
into agreement with the supplier ,you will have to pay the
demand charges during the entire period of agreement.If you
take the demand factor as 0.8 ,your CD will be 425 KVA at
0.85 pf..You can start with a lower value and ask for
sanction of additional CD if the MD exceeds the CD.Normally
you are unlikely to be penalized for exceeding CD during one
month ,depending on prevailing supply rules .

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