They differ by one letter and they are charged on separate lines, by different logic, and cutting one does not necessarily cut the other.
A kilowatt is a rate. It is how fast your building is pulling power at a given instant, the way miles per hour is how fast a car is moving. A kilowatt-hour is a quantity. It is how much power you pulled multiplied by how long you pulled it, the way miles is distance actually covered. A building can drive a large kW while consuming very few kWh, if the draw is brief. It can also consume enormous kWh at a modest, steady kW.
How each one is billed
Energy, in kWh, is billed on the total you accumulated across the month.
Demand, in kW, is billed on your single highest interval in that month. Not the average, not the total. The one worst moment, which on a ComEd commercial account is a thirty minute window. Every other interval in the billing period is irrelevant to that line.
That asymmetry is the whole reason the distinction matters. A demand charge set by one half hour can carry through a bill in which the other fourteen hundred intervals were unremarkable.
Why cutting one may not cut the other
Turning equipment off for the month lowers kWh. Whether it lowers kW depends entirely on whether it was running during the one interval that set your peak.
Run the same equipment for the same total hours but let two large loads start at the same moment, and your kWh is unchanged while your kW, and the charge that follows from it, goes up. Efficiency work and demand work are different projects, and a measure that helps one can leave the other exactly where it was.
Which one is driving your bill
This is answerable rather than arguable. Take the bill, find the energy line and the demand line, and see which is larger. Then look at the interval data behind it to find what was running when the peak was set.
Most buildings have a definite answer, and it is frequently not the one the operator expected.
What is the difference between kW and kWh?
kW is the rate at which power is being drawn at an instant. kWh is the amount of energy consumed over time. One is speed, the other is distance.
Why is my demand charge high when my usage is low?
Because demand is billed on your single highest interval, not on your total. A brief spike, sometimes lasting one measurement window, can set the charge for the entire month regardless of how little you used the rest of the time.
Can I lower kWh and kW at the same time?
Sometimes, but not automatically. Reducing total consumption lowers kWh; lowering the peak requires changing what runs during the specific interval that sets it.
References