Electricity use fell. Why did the bill rise?

Where the extra $105 comes from

This is a made-up comparison of equal-length billing periods, not a restaurant bill or quoted tariff. Energy costs $0.12 per kWh, demand costs $15 per billed kW and the fixed charge is $50. Energy use falls from 10,000 to 9,000 kWh while billed demand rises from 50 to 65 kW. The simplified bill excludes taxes, adjustments, time-of-use pricing and demand lookback rules.

Usage falls 10%, but the total rises from $2,000 to $2,105: an increase of $105, or 5.25%. Because rates and fixed costs stay constant in this example, the $225 increase in the demand line accounts for the reversal.

Read the demand rule on your account

Energy and demand describe different quantities: kWh records energy used, while kW describes the rate of use. EPA tracks demand and its cost separately from energy consumption. If your statement has a demand line, compare its billed kW, price per kW and dollar amount. [S2]

The rule belongs to the account’s rate plan. PG&E, for example, says some business time-of-use plans include demand charges and describes a maximum 15-minute interval for the plans covered by its explanation. That interval is not a rule for every restaurant or utility. [S3]

A demand lookback, or ratchet, can make an earlier peak affect the current charge; DOE describes such provisions in its rate guidance. Ask whether billed demand came from this period’s interval peak or an applicable lookback. Adding up appliance nameplate ratings or dividing monthly kWh by hours will not reconstruct that billed figure. [S1]

If there is no demand charge, move to the lines that actually changed. Energy rates can vary by time and season. Check the applicable rate dates, time bands, billing days, supply and delivery charges, taxes and adjustments. A previous balance increases the amount due without being a new electricity charge; keep balances and payments separate from the current-period comparison. [S1]

Take the unexplained line to your utility

Keep the two statements and the rate plan together. For each changed charge, retain its quantity, unit, rate and dollar amount; the differences should reconcile to the change in current-period charges. This gives the utility a specific discrepancy to explain instead of only a higher total.

A bill comparison is not a reason to shut off refrigeration, ventilation or other critical equipment to test a theory. Resolve the billing explanation first; any later equipment or schedule review still has to meet service needs, safety requirements and manufacturer guidance.

For the largest unexplained increase, ask: “Which quantity, rate, interval or lookback rule produced this charge, and where can I see the calculation for my account?” In the invented bill, the question concerns the $225 demand increase. Ask for the calculation tied to this billing period so the next operating review starts with an identified charge.