Record five numbers before analyzing anything
Write down the billing days, total kWh, billed demand in kW, total current charges, and the rate-schedule name. Those values let you normalize months, calculate an effective blended rate, and find the tariff that explains each line item.
The bill-review order
| Step | Bill item | What to verify |
|---|---|---|
| 1 | Service and rate | Account, meter, voltage, tariff, and billing dates |
| 2 | Energy | Total and time-period kWh |
| 3 | Demand | Measured, billed, on-peak, and ratchet kW |
| 4 | Adjustments | Riders, fuel, transmission, power factor, and minimums |
| 5 | Totals | Taxes, credits, prior balance, and payment due |
Separate measured quantities from prices
Meter quantities include kWh, kW, and sometimes reactive power or power factor. Prices include dollars per kWh, dollars per kW, fixed monthly charges, and percentage adjustments. Keep them separate in a worksheet. A line labeled 125 kW is a quantity; a line labeled $14.50/kW is a price; multiplying them produces a $1,812.50 demand charge before other rules.
If the bill lists several time periods, total the kWh columns and confirm they reconcile with the meter summary. Then match each period to its price. Summer on-peak energy, off-peak energy, and on-peak demand may all have different rates.
Calculate useful diagnostic rates
The blended rate is useful for budgeting, but it is not the tariff energy price. It includes demand and fixed costs. Load factor helps explain why two facilities with similar kWh can have different effective rates.
Common reasons a bill changes
- A longer billing period adds operating days.
- Weather increases HVAC or refrigeration runtime.
- One interval establishes a higher billed peak.
- A seasonal rate or rider changes.
- A demand ratchet carries an earlier peak forward.
- Production, occupancy, or operating hours change.
- A credit expires or a new surcharge begins.
Compare both quantities and prices. A higher bill is not always caused by higher consumption, and a lower kWh total does not guarantee a lower bill if demand rose.
Frequently asked questions
Where is the electricity rate on a commercial bill?
Commercial bills often do not have one all-inclusive rate. Energy, demand, customer charges, riders, taxes, and time-of-use periods may be priced separately. Divide the total bill by total kWh only to calculate a blended effective rate.
What is billed demand?
Billed demand is the kW quantity used for the demand charge. It may equal the current measured peak, but minimum-demand rules, ratchets, contract demand, or power-factor adjustments can make it different.
Why is the billing period longer than 30 days?
Meter-reading schedules vary. Always use the exact number of billing days when comparing one month with another or converting daily use into a monthly estimate.
What is an electricity rider?
A rider is an additional tariff provision or adjustment. It can change fuel, transmission, efficiency-program, capacity, or other charges. Names and calculations are utility-specific.