The short version
A rate is only cheap for a particular pattern of use. So before you compare anything, write down the pattern — and what the customer is allowed to buy.
There are two sets of facts and they do different jobs. One set decides which rates the customer may take. The other decides what each of those rates would cost them. Get the first set wrong and the whole comparison is void, no matter how good the arithmetic is.
Step 1
Collect twelve months, not one.
Step 2
Some facts decide what they may take.
Step 3
Other facts decide what it costs.
Step 4
Then ask whether the usage fits the business.
The facts that decide eligibility
| Commodity | What you must establish |
|---|---|
| Electric | Customer class and business type; service voltage; the highest measured demand and its range across the year; whether supply is default or from a third party. |
| Water and sewer | Meter size for every meter; service type; whether sewer is billed on water volume or on an EDU count. |
| Gas | Service class; delivery pressure; sales service or transport service. |
If a bill does not show one of these, say so and ask. A guess here is worse than a blank, because a guess quietly survives into the final number.
The facts that decide cost
- Twelve months of usage, and twelve months of peak demand if the meter records it.
- What the business actually does, and roughly what hours it runs.
- Whether the load is flat or spiky.
- Anything seasonal — cooling in summer, heating in winter, a plant that shuts in August.
Many meters. A customer with several accounts gets one profile per account. Do not average them together — two sites on the same rate can need two different answers.
What can kill a good-looking finding
You have found a cheaper rate the customer is eligible for. Before it becomes a finding, five things can still take it away.
Minimum bill. The tariff sets a floor. Savings that drop the bill below the floor are not real savings.
Ratchet. A demand charge that keeps being set by a past peak for months afterwards. Cutting demand today may not lower the bill for a year.
Switch limits. Many tariffs allow one rate change per twelve months, with written notice. Timing matters.
Contract term. Some rates lock the customer in, with a fee to leave early.
Supply contract. In a deregulated state the supply agreement runs on its own terms. It can block a switch or charge to exit, even when the utility side is fine.
The one thing to remember
You cannot compare rates until you can describe the customer in one paragraph. Write that paragraph first — class, voltage or meter size, demand, usage shape, supply arrangement. Everything after it depends on it being right.
Check yourself
Why is one month of usage not enough?
Because rates behave differently across seasons. A rate that is cheapest in July can be the most expensive in January, and you would never see it.
Which comes first, eligibility or cost, and why?
Eligibility. Costing a rate the customer is not allowed to take is wasted work, and presenting it is worse than wasted.
A ratchet is in the tariff. Why does that weaken a demand-reduction finding?
Because the billed demand keeps being set by an earlier peak. The saving does not arrive when the customer changes behaviour; it arrives much later, if at all.
The site is a large plant but the bills show tiny usage. What is your first thought?
There are meters or accounts you have not been given. Ask for the full list before going any further.