Why Switching Electricity Suppliers Barely Lowered Your Bill

You did the responsible thing. Someone came around, showed you a lower rate, and you switched your energy supplier. Maybe you went from seven cents to six and a half. Every other business owner you asked talked about their bill the same way, in cents per kilowatt hour, so you knew you were comparing the right number. You got a better one.

Then the bill came, and it looked about the same.

If that happened to you, nothing went wrong with the switch. The switch did exactly what a switch can do. The problem is that it only ever touches one half of your bill, and for a lot of commercial accounts it is not the half that hurts.

Your bill has two halves, and they do different jobs

A commercial electric bill is really two bills stapled together.

One half is supply. That is the energy itself, measured in kilowatt hours, the cents per kWh number everyone talks about. In Illinois this half is a competitive market. Third party suppliers can sell it to you, which is why someone can knock on your door and offer you a better rate on it.

The other half is delivery. That is what it costs to move the energy over the wires to your building. Think of it this way. The energy travels a long way to reach you, and ComEd owns the local roads it comes in on. You do not get to shop for who owns those roads. There is one set, they are regulated, and everyone in the area uses them.

Here is the part that matters. You cannot get off ComEd. People say all the time that they want off ComEd, and they are surprised to hear that you literally cannot. ComEd delivers the power no matter who you buy it from. You never get a choice about who delivers it.

The reason the two halves behave differently is simple. Years ago Illinois opened the supply half to competition, so companies are allowed to sell you the energy and compete on the rate. It left the delivery half a regulated monopoly, because it makes no sense to run three different sets of wires down the same street. That is why one half of your bill has a salesperson and the other half never will.

The switch can only touch the half you can shop

So when you switched suppliers, here is what actually happened. You changed the price on the supply half. That is the only half a supplier can change. You are still using the same amount of energy you used before. All that moved was the accounting on one part of the bill.

And the margins on energy are already thin. There is not much room to save by re-pricing something that was close to the bone to begin with. It might save a little. It might not. Either way, it left the other half of your bill completely alone.

If you are still shopping, and want to know what the comparison can and cannot be expected to deliver before you sign, we wrote the prospective version of this page: which Illinois electricity supplier is actually cheapest for a business, and what the quoted rate leaves out.

The part quietly running your bill

For a lot of commercial accounts, the delivery half is where the real money is, and inside the delivery half there is a charge most owners have never had explained to them. It is the demand charge.

Energy is billed for how much you use over the whole month. Demand is billed for your single worst moment. Somewhere in the month there is one thirty minute window where you were pulling the most power at once, and that one window sets a charge for the entire month. It is measured in kilowatts, not kilowatt hours, and it gets multiplied by a rate that runs around fifteen dollars for every kilowatt.

Picture a paint shop running two lifts, a compressor, and a paint booth. Any month those all happen to run in the same half hour, that half hour writes the demand charge for the month. You could run a careful, efficient operation the other twenty nine days and it would not matter. The bill remembers the worst thirty minutes.

That is the charge a supplier switch cannot touch, because it lives in the delivery half, the half nobody can negotiate.

What it looks like on a real bill

On one ComEd commercial bill we reconstructed, a single thirty minute window set a demand charge of $596.88. Not the energy. The energy was billed separately, for everything the business used across the whole month. This one charge came from one half hour of one day, and it landed on the delivery half of the bill, the half no supplier switch can reach.

That is the whole point. Not that anyone overcharged them. The number is correct. It is that the number they were fighting to lower was never the number that mattered.

There is no enemy here. There is a gap.

Nobody set out to keep this from you. It was never the utility's job to sit you down and explain how the demand charge works, and it was never the supplier's or the solar company's fault that they cannot lower the half of the bill where it lives. Add it up and you get an owner with a painful bill they cannot explain and nobody whose job was to explain it. That is the gap.

Seeing which half is the problem

Which half of your bill is driving it is not a matter of opinion. It is in the interval data, and it can be reconstructed. The free reconciliation runs that reconstruction on any ComEd commercial account and shows the exact thirty minute interval that set the demand charge, reconciled against the bill. Whether that is worth doing anything about is a separate question, and both answers are legitimate.