Why Is My Business Power Bill So High?

If your consumption has not changed but your invoice has, the answer is usually not on the energy line. It is on the delivery side, and it is probably being set by a handful of minutes.

In plain language

The short version

  • Your bill has two halves. One is for how much power you used. One is for delivering it.
  • The delivery half is where the demand charge hides. It can jump even when your usage does not change.
  • There are four common reasons your bill went up.
  • A new spike. One busy 15 minutes can set the fee for the whole month.
  • An old spike. A ratchet can keep charging you for something that happened months ago.
  • A size you no longer need. You may still be paying for equipment you removed.
  • A rate change. Delivery rates do go up sometimes. Worth ruling out first.
  • Your power company will give you your 15-minute data for free. That is the only way to know which one it is.

Full detail below.

Start by splitting the bill in two

A commercial invoice has an energy side and a delivery side. The energy side scales with how many kilowatt-hours you consumed. The delivery side covers moving that power to your site, and on a demand-billed account it contains a charge calculated from the highest rate you drew power at any single moment.

These two sides move independently. That is why a month of ordinary operations can produce an extraordinary bill, and why looking at consumption totals to explain it gets you nowhere.

One real example

At a grain operation in the south of the province, demand charges accounted for 43.7% of a $75,389 annual electricity bill. Close to half the invoice was set by the height of the site's peaks rather than by the quantity of power it used. See the breakdown.

The four usual suspects

A new peak

One interval where loads happened to stack up. Fifteen minutes out of roughly 2,900 in the month, setting the charge for all of them.

A ratchet carrying an old peak forward

Under a ratchet provision your billing demand is held at a percentage of an earlier peak. The bill you are looking at may be reflecting something that happened months ago.

Contracted demand set for load you no longer run

Capacity charges billed against an agreed level rather than actual usage. If the equipment that justified that level is gone, you are still paying for it.

A tariff rate change

Distribution rates are approved periodically and do move. Worth ruling out before assuming something changed at your facility.

How to tell which one it is

Interval data. Your distributor holds a time stamped record of your demand, usually at fifteen minute resolution, and will provide it on request at no cost. It shows which intervals set each month's billing demand and, cross referenced against your operations, what was running during them.

Everything downstream of that, whether the answer is rescheduling, power factor correction, storage or a contract renegotiation, depends on what that data says. Anyone proposing a fix before seeing it is guessing. The four practical levers are set out here.

Frequently Asked Questions

On a demand-billed account the most common cause is the demand line rather than the energy line. A single high interval can raise the charge for the month, and under a ratchet provision it can raise the charge for many months afterward. None of this is visible from monthly consumption totals.

If you are on a demand-billed commercial rate, check whether the increase sits in the system usage charge, which follows your metered peak, or in the transmission capacity and local facilities charges, which follow contracted demand. They have different causes and different fixes.

Delivery covers distribution and transmission, the cost of moving power to your site rather than the energy itself. On commercial accounts this is where demand charges live, which is why a bill can rise sharply without consumption changing at all.

It varies widely by site and rate class. On one completed project in the province, demand charges accounted for 43.7% of a $75,389 annual bill, close to half the total. A site with steady, flat load would sit far lower.

Request interval data from your distribution company. It shows demand at fifteen minute resolution, which identifies the exact intervals setting your billing demand and what was running during them. It is free to request and it is the only way to answer this question properly.