  Load factor is an expression of how much energy was used in a time period, versus how much energy would have been used, if the power had been left on during a period of peak demand. It is a useful indicator for describing the consumption characteristics of electricity over a period of time. Customers whose facilities are metered for demand can readily determine the load factor for any given month. Facilities billed at highest peak demand during the billing period should avoid periods of increased demand whenever possible.

The load factor percentage is derived by dividing the total kilowatt-hours (kWh) consumed in a designated period by the product of the maximum demand in kilowatts (kW) and the number of hours in the period. In the example below, the monthly kWh consumption is 65,000 and the peak demand is 125 kW. There were 30 days in the billing period.

Load Factor = 65,000 kWh/(125kW x 30 days x 24 hours/day) = 65,000kWh/90,000 kWh = 72.2% load factor

This load factor indicates the monthly energy consumption of 65,000 kWh used by the customer was 72.2% of the total energy available (90,000 kWh) for use at the 125 kW level.