Here comes the dicey question. Every good survey has to have at least one right? Commercial electricity rates are very confusing and most utilities want to keep it that way. Electric utilities are good at keeping rates confusing while the wireless phone companies have taken confusing rates to a whole new level, but that’s different survey. Regardless of the kind of confusion implemented by electric utilities buying night time electricity is almost always less expensive.
Commercial and Residential electric bills are calculated differently. Residential rates charge you for your energy usage only, so consumed kilowatt-hours (kWh) are multiplied by a constant cost, for instance 10 cents per kWh. Commercially you are charged for your kWh consumption and you are also charged for your monthly peak usage, called Peak Demand, which is in kilowatts (kW). Since most building are used during the day this demand charge added to daytime costs of electricity.
For example, a standard commercial rate may have the same energy charges day and night. However, lowering peak demand during daytime hours lowers the Demand Charge on the electricity bill. Therefore moving consumption of electricity to off peak periods at night will save money.
What about “Flat Rates? In a deregulated marketplace “Flat Rates” may be offered and they may not show any difference between day and night rates. However, the flat rate is usually determined by analyzing the buildings historical consumption. Buildings that consume a good portion of their electricity during peak periods will have a higher cost flat rate than a building that shifts consumption off peak. Both of these rate names, standard demand rate and flat rate, do not indicate a time of use savings but there are time of use saving opportunities.