Utility billing glossary
Know what the invoice is saying.
Plain-language definitions for commercial electricity and natural gas billing. Your actual tariff, supplier agreement, and account facts determine how a term applies.
Request a review ↗U.S. commercial accounts · Electricity & natural gas
Use this glossary alongside our electricity audit guide and natural gas audit guide. Definitions describe review concepts; they do not establish that a charge is wrong.
Accounts & rates
Commercial utility bill audit
A structured review of business utility invoices and supporting records for billing accuracy and possible overpayments.
Utility tariff
The applicable schedule of utility rates, conditions, and service rules. The account’s actual tariff governs the calculation being reviewed.
Rate classification
The account category or rate schedule used for billing. Eligibility and terms must be checked against the relevant service requirements.
Tariff rider
An additional charge or adjustment defined by the applicable rate terms. A rider is not automatically an error.
Supply charge
The charge for the electricity or natural gas commodity under the applicable utility rate or supplier agreement.
Delivery charge
Charges associated with delivering energy through the applicable utility system. They may appear separately from supply charges.
Supplier contract compliance review
Checking invoice charges against the relevant supplier agreement and amendments for the billed period.
Time-of-use rate
A rate structure that varies with defined time periods. Review requires the applicable periods, prices, and allocation of usage.
Electricity
Kilowatt (kW)
A unit of power equal to 1,000 watts. It describes the rate of electricity use, rather than the total energy used over a period.
Kilowatt-hour (kWh)
A unit of electrical energy: one kilowatt used for one hour. Usage charges commonly refer to billed kWh.
Demand charge
A charge based on measured or billed power demand under the applicable rate. It is distinct from a charge for total energy consumed.
Demand ratchet
A billing provision that can carry part of an earlier demand level into a later billing calculation. The applicable tariff defines the rule.
Power factor
A measure relating real power to apparent power. Some tariffs include a charge or billing adjustment related to power factor.
Meter multiplier
A factor used to convert certain meter readings into billed quantities. Its application should correspond to the metering arrangement.
Peak demand
The highest demand measured over the relevant interval and period. Billed demand may diffe