What’s the difference between residential and business electricity rates?
One often overlooked part of Texas energy deregulation is that energy choice also applies to business electricity rates. That’s right. Owners of small and commercial businesses can use Save On Energy® to make sure to buy a great business electricity plan.
Still, there are some differences in the way the process works. When customers want to search for “electricity rates in my area,” they need only provide their ZIP code. You can compare rates, figure out what works best for your usage and sign up online if you wish.
Business electricity rates don’t work that way.
What makes plans from business electricity suppliers different?
By and large, residents use much less electricity per month than businesses. Average residential consumption in the U.S., for example, is 897 kilowatt hours (kWh) per month, according to the Energy Information Administration. Average commercial, or business, electricity usage per month in the U.S. is 6,278 kWh.
Another difference is price. Average Texas residential energy rates in November 2020 were 12.2 cents/kWh, while business electricity rates averaged 7.93 cents/kWh.
Usage patterns also differ according to the type of company signing up for a plan. Whereas most residences use the bulk of their electricity during the daytime and early evening, many business electricity customers consume power as many as 24 hours a day. That’s why we need some information – to make sure you’re getting the right plan based on how you use energy.
For example, office buildings tend to use nearly twice as much electricity as health-care businesses and nearly three times as much as warehouses.
How businesses use electricity
Businesses don’t use electricity the same way residential customers do. Here’s where the bulk of their energy goes.
| Function | % of electricity used | Amount of electricity used |
|---|---|---|
| Lighting | 17% | 212 billion kWh |
| Refrigeration | 16% | 196 billion kWh |
| Ventilation | 16% | 196 billion kWh |
| Cooling | 15% | 185 billion kWh |
| Computers | 10% | 119 billion kWh |
Source: Energy Information Administration. Note: Other sources of electricity use include office equipment, cooking, and space and water heating.
The takeaway: Business electricity plans should be customized so that they correspond to the way energy is used.
How residential and business electricity are the same
Regardless of the provider you choose for your home or business, electricity is transmitted to the establishment by a utility, called a transmission and delivery utility (TDU) or a transmission and delivery service provider (TDSP) in Texas.
There are five TDSPs in Texas, and they also are in charge of maintaining the electricity infrastructure and addressing power outages. Again, you should contact your utility in case of an outage, not your provider.
Save On Energy works with Ambit Energy and Hudson Energy among other providers in Texas.
How to purchase a business electricity plan
SaveOnEnergy.com energy experts work with business owners or operators to customize business electricity rates. How? We help companies navigate the process and negotiate with providers on your behalf.
Business energy is deregulated in Texas, but you only benefit from the power to choose a provider if you take the time to consider your options. To speak with one of our experts and get more information about business electricity rates and plans, call the number on this page or fill out this form.
Updated: 2/5/2021
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