Your Utility Bill Is Two Bills

A commercial electricity bill is two bills printed on one page, and almost every useful finding depends on telling them apart.

One half is supply: the commodity itself, the electrons. In the states that deregulated, this half is competitive, and you can buy it from whoever you like. The other half is delivery: the poles, wires, meters and maintenance belonging to the regulated utility, which is a monopoly whose rates are set by a public commission.

The distinction matters because the two halves fail in completely different ways. Supply goes wrong because of a contract. Delivery goes wrong because of a classification. You cannot negotiate delivery and you should not assume supply is fixed.

Start with one chart

Pull twenty four months of bills for every meter. On each one, separate the supply charges from the delivery charges, then divide supply cost by kilowatt hours used to get a supply rate per kWh. Plot that rate by month.

You are looking for a step. A supply rate that runs flat for eighteen months and then jumps is not a market movement, it is a contract that expired. That single chart finds more money than any other thing on this page.

The supply side

Expired and evergreen contracts

Find the end date of every supply agreement you hold and put it in a calendar, minus 90 days. Some agreements also renew automatically into a new term unless you give notice, which is the same trap software renewals set, so read the notice clause rather than assuming the end date is an exit.

Fixed against index, and what the fixed rate is buying

A fixed rate is not automatically the better deal, it is a purchase of certainty, and the premium for that certainty is part of the price. What matters is knowing which you are on and that it was a decision. Many businesses are on a variable rate because a fixed one lapsed, which is not a decision at all.

Pass through clauses

Read what the fixed price actually fixes. Some contracts fix the energy component and pass through capacity, transmission and ancillary charges, which can move independently. A quoted rate that looks better than the market is often better because it is fixing less.

The delivery side

You cannot shop this half, but you can be on the wrong version of it, and being on the wrong version is common.

Rate class and tariff

Utilities publish multiple rate schedules, and eligibility depends on things that change: usage volume, demand profile, voltage, and the nature of the business. A company placed on a small commercial schedule years ago may now qualify for a general service or time of use schedule that fits its load far better. Nobody at the utility is monitoring this for you. The tariffs are public documents and the comparison is arithmetic against your own interval data.

Demand charges

For most commercial accounts, a significant part of delivery is billed not on total consumption but on the single highest demand interval in the month, usually measured over 15 minutes. You are billed on your worst quarter hour.

Two things follow. First, one unusual event, a simultaneous startup, a test, an unusually hot afternoon, can set a peak that costs money all month. Second, some tariffs carry a ratchet: the peak follows you, setting a floor on billed demand for the next eleven months. A single spike can therefore be paid for eleven more times. Checking whether your tariff has a ratchet clause, and whether a historic spike is still setting your floor, is a specific and checkable question.

Power factor

Facilities running significant motor load can be penalized for a low power factor. The charge is often small enough to ignore line by line and steady enough to matter annually, and it is one of the few utility findings with an engineering fix rather than a paperwork one.

Meter multipliers and estimated reads

A meter multiplier applied incorrectly scales an entire bill, and the error can persist for years because the bill still looks like a bill. Estimated reads are the other one to watch: a run of estimates followed by a true up is normal, a permanent run of estimates is not. Both are checkable against the meter itself.

Sales tax, which is worth checking separately

Many states exempt or partially exempt energy consumed directly in manufacturing, processing, or agriculture, sometimes requiring a utility study to establish the exempt percentage and sometimes allowing a look back claim for tax already paid. The rules are state specific and change, so this is a question for your tax advisor rather than a line to correct on the spot. It is worth asking, because where it applies it tends to be a large number, and it is often left unclaimed simply because no one raised it.

Multi-site is where the pattern shows

A business with several locations frequently finds the same operation on different rate schedules, different supply contracts and different expiry dates, because sites were opened in different years by different people. Line the sites up side by side. The variance between two locations that do the same thing is the fastest way to see which one is wrong, because an anomaly is only visible once like is placed next to like. That is the same reason a single line on a statement means little until it is benchmarked against what that line should cost.

Gas, water and the rest

Natural gas follows the same supply and delivery split in deregulated markets and rewards the same expiry check. Water and sewer usually cannot be shopped, but sewer is frequently billed as a function of water consumed, which means water that does not enter the sewer system, irrigation, evaporative cooling, product water, may be recoverable through a deduct meter. Whether that is worth installing is arithmetic on your own volumes.

What to do on Monday

Collect twenty four months for every meter, separate supply from delivery, chart the supply rate, and find every contract expiry date. That is a morning of work and it locates the large finding if there is one.

Then diary the expiry dates, because this category has a property most do not: the failures are scheduled. A supply contract has a known end date, a ratchet has a known window, a tariff eligibility changes when your load changes. Everything here is knowable in advance, which is exactly why it is worth watching continuously rather than annually.