Electricity is electricity. But the way it's priced, contracted, and delivered to a business is fundamentally different from how it works at home.
Pricing Structure
Residential plans are simple. You pick a rate, you pay per kWh, done. Commercial pricing has more variables: demand charges, load factor, time-of-use tiers, and capacity tags that can shift your effective rate significantly.
A business using 50,000 kWh per month doesn't get the same rate structure as a household using 1,200. Volume matters, but so does when and how you use power.
Demand Charges
This is the biggest difference most businesses don't know about. Your demand charge is based on your peak usage in a billing period — measured in kW, not kWh. Hit a high spike for even 15 minutes and it sets your demand charge for the entire month.
Residential customers don't deal with this. Commercial customers can't avoid it. But understanding it means you can manage it.
Contract Flexibility
Residential contracts in deregulated states are straightforward — pick a term, pick a rate, switch when it ends. Commercial contracts offer more customization: blended rates, index-plus pricing, block-and-index structures, and custom term lengths.
More options means more opportunity to save — but also more room to get a bad deal if you don't know what you're looking at.
Multi-Location
If your business operates across multiple sites, you can often aggregate your usage to negotiate better rates. This is something residential customers simply can't do.
A chain with 10 locations each using 20,000 kWh has the buying power of a single 200,000 kWh account. Providers want that volume, and they'll price accordingly.
The Bottom Line
Residential energy shopping is a 5-minute decision. Commercial energy procurement is a strategic one. The stakes are higher, the savings are bigger, and the complexity is real. That's why most businesses work with a broker.