Peak demand refers to periods when electricity consumption reaches its highest levels, typically hot summer afternoons (air conditioning) or cold winter mornings (electric heating). Electrical systems must have capacity to meet peak demand even if that capacity sits unused most of the time. Peak demand drives infrastructure investment in generation and transmission facilities. Time-of-use pricing charges higher rates during peak periods, encouraging consumers to shift usage to off-peak times. Municipalities can reduce peak demand through building efficiency, smart controls, and shifting operations like water pumping to off-peak hours, reducing both costs and strain on electrical systems.