How to read a commercial electricity bill

Usage and demand are different

Energy usage is usually measured in kilowatt-hours over the billing period. Demand reflects the rate of electricity use, often the highest measured interval during that period. A business can reduce total usage while still creating a high demand peak.

• Compare billed kWh with prior periods and operational changes.
• Identify billed demand, the measurement interval, and any ratchet or minimum.
• Confirm meter numbers and service addresses for every location.

Separate supply from delivery

In competitive retail markets, a third-party supplier may provide the electricity supply while the local utility continues to deliver it. The EIA notes that local utilities operate the distribution system regardless of the electricity source.

• Find the supplier name and supply rate.
• Find the utility delivery and regulated charges.
• Check whether the supplier charge appears on the utility bill or a separate invoice.

Reconcile the bill with the contract

Match the rate, term, account list, and product description to the signed agreement. Investigate adjustments, pass-through items, taxes, late fees, and unexpected changes before assuming the unit rate explains the total bill.