How to read a commercial electricity bill, line by line

The five numbers that matter

• Kilowatt-hours for the period. How much electricity you consumed.
• Peak kilowatts. Your highest rate of draw, present only if demand-metered. Often labelled demand, billing demand or maximum demand.
• Supply cost. The contestable portion.
• Delivery cost. The regulated portion, including demand, fixed charges and riders.
• The rate schedule code. Usually a short alphanumeric identifier. It determines every rate on the bill and it is the key to checking whether you are on the right one.

With those five you can compute your all-in effective rate, your supply effective rate and your load factor — which is most of a first-pass diagnosis.

Where each component usually sits

Layouts vary by utility, but the grouping is consistent.

• Meter reading section: read dates, previous and current readings, any multiplier, and the resulting kWh.
• Supply or generation section: sometimes a separate block, sometimes a separate page, and in some markets a separate bill entirely from the supplier.
• Delivery or distribution section: the utility's charges, usually the longest part of a commercial bill.
• Demand: within the delivery section, showing a kW figure and a rate.
• Riders and adjustments: several small lines, often with opaque names, within the utility section.
• Taxes: at the end.

The meter multiplier — the error nobody looks for

Some commercial meters record a scaled value that must be multiplied to get actual consumption. The multiplier is printed on the bill, often small, often near the meter reading.

It is worth confirming once that the multiplier is correct for your meter, because an incorrect one scales your entire bill, every month, invisibly. It is uncommon but it is not rare, and it is the single highest-value thing on a commercial bill to verify at least once.

Checking that measured and billed demand agree

If your bill shows both a measured demand and a billed demand and they differ, you are being billed on a floor rather than on what you drew. That is a ratchet clause and it is worth reading the tariff to understand when the floor drops.

If only one demand figure appears, you cannot tell from the bill alone. The tariff will say whether a ratchet applies to your schedule.

What is not on the bill

Three things you will usually need and will not find printed:

• Your contract expiry date. Most commercial bills do not show it. It is on the contract, and it is a large part of why these dates get lost.
• The ratchet terms, the demand interval length and the eligibility conditions for other schedules. All in the filed tariff.
• Interval data. The bill gives you a monthly peak; the detailed profile behind it is held by the utility and usually available on request.

If supply and delivery arrive separately

In several competitive markets the supplier bills separately from the utility. You need both to see the whole picture, and any analysis built on one of them is incomplete.

This also creates a specific trap: comparing a supplier quote against a supply-only bill looks like a like-for-like comparison and is not, because it silently excludes the regulated half. Always reconcile both bills to the same period before comparing anything.

Common questions

What does kW mean on my electricity bill?

Kilowatts measure your rate of electricity draw, as distinct from kilowatt-hours which measure quantity consumed. A kW figure on a commercial bill is your peak demand and drives the demand charge.

What is a meter multiplier?

A factor applied to the raw meter reading to produce actual consumption, used on some commercial meters. It is printed on the bill and an incorrect multiplier scales the entire bill invisibly.

Why do I get two electricity bills?

In some competitive markets the supplier bills for the supply portion separately from the utility, which bills for delivery. Both are needed to see the full cost.

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