A system and method are provided for managing battery discharge during critical peak pricing (CPP) intervals. The method provides an alternating current (AC) client with a fluctuating AC grid demand, and a direct current (DC)-to-AC inverter having an input connected to a battery and selectable inversion power output levels connected to the AC client. In response to receiving a CPP warning for a first time interval, a present battery capacity state of charge (SoC) is determined. Also determined is a target peak demand for the AC client over a second time interval that includes the first time interval. The target peak demand defines a desired maximum threshold AC grid demand. In response to determining the present battery capacity SoC and the target peak demand, excess battery capacity is determined, and the excess battery capacity is used to supply auxiliary energy to the AC client during the CPP first time interval.