A commercial electric bill is not one charge — it is several, each set by a different entity, each responding to a different cost driver. Supply charges cover the electricity itself and are shoppable in deregulated states. Delivery charges cover the wires and meters your regulated utility owns and are not shoppable, no matter which supplier you choose.
Supplier quotes routinely show only the supply piece. Reading every line — customer charge, energy charge, demand charge, riders — is the only way to know what a contract actually costs you.
Electricity deregulation separated one monopoly into two pieces. Generation and supply — the business of buying and selling electrons — became competitive. Transmission and distribution — the physical infrastructure that moves power from the grid to your meter — stayed regulated. That split is why your Ohio, Pennsylvania, Massachusetts, New Jersey, DC, or Texas bill has two distinct sections, and why a supplier can only quote you one of them.
The regulated utility's default supply product goes by different names: Standard Offer Service (SOS) in Washington DC, Standard Service Offer (SSO) in Ohio, Basic Generation Service (BGS) in New Jersey, Basic Service in Massachusetts. Ohio and Pennsylvania publish the default rate on the bill as the “Price to Compare” — the benchmark any supplier quote has to beat. Switching to a competitive supplier replaces that default rate. Every other line on the bill stays exactly as it was.
Grid operators PJM (covering the mid-Atlantic and Midwest), ERCOT (Texas), and ISO-NE (New England) run the wholesale markets that set the underlying cost of power. Their charges flow into both supplier prices and the utility's own riders — which is why capacity costs appear on the delivery side even when you have a fixed-price supply contract.
A flat monthly dollar amount billed regardless of usage. Utilities use customer charges to recover the fixed cost of your service connection, meter, and account maintenance. Pepco in Washington DC charges $35.59 per month on its GSND commercial schedule — that dollar figure appears whether the building uses 1 kWh or 100,000. Customer charges are set by tariff and are unaffected by switching suppliers.
The volumetric charge billed in cents per kilowatt-hour consumed. The energy charge appears on both the supply side (what your supplier charges for the electricity itself) and the delivery side (the utility's per-kWh distribution cost). When a supplier quotes you a rate, that rate covers the supply energy component only — the delivery energy component remains with the utility. To understand true per-kWh cost, add both figures.
Demand charges bill your highest 15-minute power draw of the month in dollars per kilowatt — not total consumption, but peak rate of draw. New Jersey EDCs and Texas TDUs commonly add demand billing above roughly 10 kW; Pepco DC moves businesses from the non-demand GSND schedule to the demand-billed GSLV schedule above roughly 25 kW. Demand charges are a delivery-side cost set by the utility tariff and do not change when you switch suppliers. See our full guide on demand charges for how to read and reduce them.
Riders recover costs the utility cannot predict far enough ahead to set in base rates. Common examples: transmission cost recovery (paying grid operators like PJM, ERCOT, and ISO-NE for transmission infrastructure); capacity cost recovery (paying for reserved generating capacity to meet peak demand); state energy efficiency program funds; and grid modernization charges. Riders are reviewed and reset through state commission filings — they can rise or fall mid-contract without triggering your supplier agreement. They sit on the delivery side of the bill and are not shoppable.
| Line item | What it is | Who sets it | Shoppable? |
|---|---|---|---|
| Supply / energy charge | Cost of electricity per kWh | Competitive supplier (or default utility rate) | Yes |
| Customer charge | Flat monthly meter/service fee | Regulated utility (tariff) | No |
| Delivery energy charge | Per-kWh cost of distribution wires | Regulated utility (tariff) | No |
| Demand charge | Peak 15-min draw ($/kW) | Regulated utility (tariff) | No |
| Transmission rider | PJM / ERCOT / ISO-NE grid costs | Regulated utility (commission filing) | No |
| Capacity rider | Reserved generating capacity costs | Regulated utility (commission filing) | No |
| State program riders | Energy efficiency, grid modernization funds | Regulated utility (commission filing) | No |
| Taxes and fees | State / local / utility taxes | State and local government | No |
Consolidated billing puts supply and delivery on one statement from your utility. The supplier passes its charges through the utility's billing system, so your accounts payable department sees a single invoice. Dual billing splits the two: your utility invoices for delivery; your supplier invoices separately for supply.
Consolidated billing is simpler to reconcile and less likely to produce late-payment confusion. Dual billing makes the supply cost more visible as a standalone figure. Which option is available depends on your state and your specific utility — ask your supplier during contract negotiation which billing method they support and which your utility allows.
Supplier quotes default to showing only the supply rate. That figure looks attractive in isolation because it omits the customer charge, delivery charges, demand charges, and riders — all lines that stay on your bill regardless of who supplies your electricity.
To evaluate a quote accurately, do two things. First, pull a recent bill and identify every non-supply line and its cost. Second, ask each supplier to quote a fully-loaded per-kWh equivalent: supply rate plus any pass-through capacity costs the supplier bundles in. Then add the non-supply utility lines yourself to get a true apples-to-apples comparison.
A supplier that refuses to disclose pass-through capacity costs is worth scrutinizing. Capacity costs in PJM markets can be significant and are sometimes hidden in supplier contracts as variable pass-throughs that only materialize at settlement. Fixed all-in rates protect you from that exposure; variable rates that exclude capacity do not.
Start at the top of the bill and confirm the rate schedule name — this tells you which tariff governs the non-supply charges. Commercial schedules are named differently by each utility (Pepco's GSND and GSLV, for example), but the name determines whether demand billing applies, what the customer charge is, and which riders are active.
Next, locate the supply section and note the per-kWh rate and the supplier name. If the rate reads as your utility's default (SOS, SSO, BGS, Basic Service, or Price to Compare), you are on the default rate and supply is the first thing worth shopping.
Then scan the delivery section. Identify the customer charge (flat dollars), the delivery energy charge (¢/kWh), and any demand charge line ($/kW). Add up every rider line — these are the items most businesses miss when estimating potential savings.
For example: a business paying $800/month might find $350 on supply, $180 on delivery energy, $150 on demand, $75 on riders, and $45 on customer charge and taxes. Only the $350 supply figure responds to switching suppliers. Understanding that split sets realistic expectations before entering any negotiation.
Supply charges cover the electricity itself — electrons purchased from a generator and brought to the regional grid. Delivery charges cover the poles, wires, transformers, and meters your utility owns to move that electricity to your building. In deregulated states (Ohio, Pennsylvania, Massachusetts, New Jersey, Washington DC, Texas) supply is shoppable; delivery is not. Your regulated utility sets delivery rates through a state commission process, and switching suppliers does not change them.
A customer charge is a flat monthly fee that appears on the bill regardless of how much electricity you use. Utilities use it to recover the fixed costs of maintaining your meter, service connection, and account — costs they incur even if your building sits dark all month. The amount varies by utility and rate class; Pepco in Washington DC, for example, charges $35.59 per month on its GSND commercial schedule. Customer charges are set by the utility tariff and are not affected by switching suppliers.
Riders (also called adjustments or surcharges) are separate line items that recover costs the utility cannot predict accurately enough to bake into base rates. Common riders include transmission cost recovery, capacity cost recovery (grid operators like PJM, ERCOT, and ISO-NE charge utilities for reserved generating capacity), state energy efficiency program funds, and infrastructure modernization charges. Riders change periodically after state commission filings. They appear on the delivery side of the bill and are not shoppable.
Supplier quotes typically cover only the supply (energy) portion of your bill — the part that is shoppable. They do not include the customer charge, delivery charges, demand charges, riders, or taxes, which are set by your utility and stay the same no matter which supplier you choose. To compare fairly, ask every supplier for an all-in per-kWh equivalent that accounts for your actual load profile, or ask your utility for a detailed rate breakdown so you can add the non-supply lines yourself before signing.
Consolidated billing means your utility sends one bill that includes both the delivery charges it controls and the supply charges from your competitive supplier — the supplier passes its charges through the utility. Dual billing means you receive two separate invoices: one from the utility for delivery, one directly from your supplier for supply. Which method is available depends on your state and utility. Consolidated billing is simpler to reconcile; dual billing can make the supply cost more transparent since it appears on its own invoice.
Send us a recent bill. Our commercial team reads every line, checks your rate schedule, and pulls competitive supply quotes based on your actual usage — free, typically within 48 hours.
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