Commercial electricity

Your electric bill is too high. It may not be your usage.

Nearly every guide to a high electric bill is about consumption — unplug things, seal the windows, run the AC less. For a business the more expensive possibility is different: the bill is correct arithmetic on the wrong rate schedule. A consumption problem costs you once. A billing problem repeats every month until someone catches it.

Four things raise a bill, and only one is usage

What drives an increase on a commercial electric bill
Cause	How to tell	Fix
You used more	kWh is higher than the same month last year	Equipment, hours, weather. This is where the usual advice applies
The rate went up	kWh flat, cost per kWh higher	Shop the supply half, or wait out a temporary rider
A demand charge was triggered	A kW line on the bill that jumped without kWh moving	Flatten the peak, or check whether the schedule still fits
Wrong rate schedule	Nothing on the bill looks unusual, and it has been high for months	Ask the utility to move you. They will not do it on their own

The fourth row is the one nobody checks, because checking it means reading the tariff your utility filed with the regulator rather than looking at your building.

How a business ends up on the wrong schedule

Your utility assigned a rate schedule when service started, based on what the business looked like then. It does not revisit that decision. If you added a walk-in freezer, dropped a shift, moved equipment or changed hours, your usage pattern changed and the schedule did not.

Both directions cost money. A business that shrank below its utility's demand threshold keeps paying demand charges it no longer owes. One that grew may be missing a schedule with a lower energy rate that would more than offset the demand charge it would start paying.

Two rules that bill you for power you never drew

These are written into the tariff and almost never explained. Both from Ohio, both read from the filed schedules:

A floor on billing demand. Ohio Edison's Rate GS bills the greater of your measured demand, 5 kW, or your contract demand. Peak below 5 kW and you still pay for 5 kW.
A minimum load factor. Duke's Rate DS recalculates billing demand as monthly kWh ÷ 71 when your usage is low relative to your peak. Sharp peak, modest usage, and you are billed on demand you never sustained.

Check this before you change anything

1.Compare the same month year over year. Utilities print last year's usage on the bill for this reason. A July against a July is a real comparison; a July against an April is not.
2.Look at kWh before dollars. If usage is flat and the bill rose, nothing changed in the building — the change is in how you're billed.
3.Divide the total by kWh. That's your all-in rate, and it will be higher than any advertised supply rate because it includes delivery.
4.Find the rate schedule code, usually in small type near the account number. Then find your peak demand in kW if the bill shows one.
5.Check the supply line for a supplier name. If one is there you're on a competitive contract with a term and an end date worth knowing.

When the usual advice is the right advice

If your usage genuinely rose — more hours, more equipment, a hotter summer — then the consumption advice everyone gives is correct, and an energy audit of the building is the right next step. Many utilities and state agencies run them free.

The point of this page is not that the usual advice is wrong. It is that nobody checks the billing first, and billing is the half that keeps costing you after the building is fixed.

Send us a bill and we will tell you which of the four it is — usage, rate, demand or schedule. If it is the schedule, we will tell you which one you should be on and what it would have saved over the past year. And if the bill is simply correct, we will tell you that too.

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Common questions

Why is my business electric bill so high?

Four things drive it, and only one is consumption: you used more power, the rate went up, a demand charge was triggered by a short peak, or you're on a rate schedule that no longer fits your usage. The last is the most expensive because it repeats every month until someone catches it.

How do I know if my electric bill is too high?

Compare it to the same month last year, not to last month — a July against a July. If usage is flat and the bill rose, the change is in how you're billed rather than what you used. Then divide the total by your kWh to get what you actually pay per kilowatt-hour, all in.

My usage didn't change but my bill went up. Why?

Usually a rate increase, a rider added to the tariff, or a demand charge triggered by a peak you didn't notice. Demand is set by your highest 15- or 30-minute interval, so one afternoon when three machines ran together can raise a whole month's bill.

Will switching electricity supplier lower my bill?

Only the supply half. Delivery — poles, wires, meter, demand charges — is regulated and comes from your utility whoever supplies you. If the increase came from delivery, switching supplier changes nothing, and that's the most common misdiagnosis on a commercial bill.

Can a business be on the wrong rate schedule?

Yes, and it is common. Utilities put you on a schedule when service starts and rarely revisit it. A business that shrank below its utility's demand threshold keeps paying demand charges it no longer owes; one that grew may be missing a cheaper schedule. Neither gets corrected automatically.

Is an energy audit the same as checking my bill?

No. An energy audit inspects the building — insulation, HVAC, lighting — and tells you how to use less. Checking the bill compares what you were charged against the tariff your utility filed. If the problem is billing, no amount of insulation fixes it.