Commercial Energy Basics

Unlike residential customers, businesses are often billed based on not just how much energy they use (consumption), but when and how intensely they use it. Understanding these factors is critical to negotiating a better rate.

Demand Charges (kW)

Utilities charge for the highest amount of power you pull from the grid at any single 15-minute interval during the billing cycle. Lowering your peak demand can significantly lower your bill.

Load Factor

This is a measure of your efficiency. A high load factor (consistent usage) is attractive to suppliers and can earn you lower rates compared to a "peaky" load profile.

Contract Volume

Larger usage means more negotiating power. Small businesses might shop off-the-shelf rates, while large industrial facilities often negotiate custom contracts.

Negotiation & Strategy

When your contract is up for renewal, don't just auto-renew. Commercial rates fluctuate daily based on wholesale markets.

  • Timing is Key: Energy markets are often lower in "shoulder months" (spring and fall) than in peak winter or summer.
  • Check the Term: Sometimes a 24-month or 36-month contract offers a better rate than a 12-month deal because it provides long-term stability for the supplier.
  • Audit Your Bill: Ensure you are classified in the correct rate class. Errors here can cost thousands over time.

What this page will not repeat

Household fixed-versus-variable comparisons live on the residential page and in the home rate guide. This page is the commercial bill: demand, load factor, and a contract you rebid before it rolls. A one-cent supply cut does not fix a demand charge set by one busy interval.

Business questions

What is a blend-and-extend?

It replaces the months left on a high fixed price with a longer term at a blended price. You give up the original end date. Price it against simply waiting and rebidding. The blend-and-extend guide walks through that choice.

Do I need a broker?

A single small site can compare the utility default price with two licensed offers. A broker is useful when you have several meters or a demand tariff you do not want to read alone. Ask how the broker is paid before you treat the recommendation as neutral.