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Phoenix Energy Blog
Choose the best energy supply option for your business in New York

Why Do My Home and Business Have Different Energy Rates?


Why are my bills so high?- This might be a question you ask yourself every month. To understand your bill total it is important to know that your bill has many line items that influence what your total cost will be.

Sure- supply, delivery, system benefits charge- these are just a few terms on your bill to understand, but when it comes down to answering why your bills are so high, how your rate is established is key. This rate, being the amount you are being charged per kilowatt hour, is directly responsible for why your bill is high as compared to low. On your Con Ed bill, there is a rate that is decided by your service classification so a brownstone has different rate than the Empire State Building.

Why Do My Home and Business Have Different Energy Rates?

There are 13 service classifications and they are based on the quality of the location- from residential to “bulk-power”, Con Edison has decided certain rates and charges for each class. The majority of accounts are under service classification No. 1- Residential or Religious and naturally apply to those buildings that are primarily used as a residence or religious institute. On your bill you will notice an “EL” prior to service classification standing for “electric” so if you see “EL-1” on your bill, you’re with this majority. The qualifications of these buildings require the residences to be each individually metered or when electric supply is utilized specifically for religious or “good-faith” purposes like veteran homes. The benefit of this classification is the ease of billing; the rates for supply, demand, and those other line item charges on your bill are simple and frequently fixed per month.

EL 1 classifications use less than 5 kilowatts (kWs) and are not billed with demand metering. Small and Large Commercial, EL 2 and EL 9, respectively, as well as other service classifications are billed with demand metering.

Demand metering and demand billing may seem complex, but they just require a different type of meter- one that measures and records energy use in 15 minute increments over the month. When a demand meter reaches a peak usage in a billing period, that peak is considered the “demand” and affects the rate for the current and next month’s billing. This number is reset when the meter is read. In essence, if you month over month reduce your demand peak, you’re leveling out your usage which is rewarded with a lower rate.

Con Edison’s rates are public and are available on their site. The second class, EL 2 is Small Commercial where a company does not exceed 10 kilowatts. Those who are expected to exceed 10 kWs total monthly include EL 8- Multiple Dwellings and EL-9 Large Commercial. The billing rates vary throughout the day for most of those under these classifications. To learn more about this “time-of-use” pricing and even estimate your bills with Con Edison’s calculator check out this link.

The classification that resonates most deeply with Phoenix’s mission is EL 11- Con Edison’s Buy Back Service. Acting quite differently from other classifications in being a rate of credit rather than debit, this classification is intended to purchase energy from individual suppliers of energy. This is applicable to residential solar panels to neighborhood funded wind turbines and even large state funded renewables operations. These rates are set by the New York Independent System Operator (NYISO). All of the renewable supply operations within the Con Ed grid location must be connected back to the grid to be subject to these rates.

Of course there are classifications for street lights and other specific utilities that will not appertain to most New York residents or business owners, but in general knowing your classification will help in identifying ways to reduce your energy bill or at least take a breath knowing your neighbors are paying the same fees.

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