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A demand-based tariff combines two elements: the energy charge based on kWh consumed and the demand charge based on the highest level of instantaneous power (kW) drawn during the billing period. This structure incentivizes customers to manage both their consumption and peak loads, since high demand spikes can significantly increase utility bills. Flat rate tariffs apply the same rate per kWh regardless of usage time or level, while time-of-use tariffs vary rates depending on periods of peak or off-peak demand. Block rate tariffs apply tiered pricing depending on total kWh used within specific thresholds. Understanding tariff structures is crucial for Certified Energy Managers because they inform load management strategies, demand-side management programs, and energy procurement negotiations. Effective peak demand reduction through load shifting, demand response, or on-site generation can yield significant cost savings. CEM candidates must be able to analyze and optimize energy bills under different utility rate structures, making demand tariffs a key exam focus.