Understanding Utility Customer Charges in Illinois: Fixed vs. Variable Costs

Decoding Your Illinois Energy Bill: What Is the 'Customer Charge' Costing Your Business?

The customer charge is a fixed monthly fee that appears on every commercial energy bill in Illinois, regardless of how much energy you consume. Understanding what this charge covers and why it exists helps you interpret your bill accurately.

What the Customer Charge Covers

The customer charge recovers utility costs that don't vary with your energy consumption:

• Metering: The cost of providing and maintaining your electric or gas meter
• Billing: Processing, printing, and mailing (or electronic delivery of) your monthly bill
• Customer Service: Operating call centers and online account management systems
• Service Connection: Maintaining your physical connection to the utility infrastructure
• Administrative Overhead: Account management and record-keeping

Typical Customer Charge Amounts

Customer charges for commercial accounts in Illinois vary by utility and rate class:

Note: Actual charges depend on your specific rate schedule and may change. Check your bill for current amounts.

Can You Reduce the Customer Charge?

The customer charge is a fixed, regulated amount that you cannot negotiate or reduce through conservation. However, understanding it helps you:

• Accurately compare the total cost of different rate schedules
• Evaluate whether consolidating meters makes sense
• Understand the "floor" of your monthly bill even during low-usage periods

The Unavoidable Truth: A Breakdown of Fixed Utility Costs for ComEd & Ameren Users

Beyond the customer charge, other fixed costs appear on your Illinois commercial energy bill. While you can't eliminate these, understanding them helps you budget accurately and identify where your savings efforts should focus.

ComEd Fixed Costs

Ameren Illinois Fixed Costs

Natural Gas Fixed Costs

Both Nicor Gas and Peoples Gas/North Shore Gas include similar fixed charges:

• Customer Charge: Fixed monthly fee for gas service
• System Charges: Fixed charges for infrastructure investment recovery
• Service Connection: Maintaining your gas meter and service line

The Fixed Cost Reality

For a typical small commercial customer in Illinois, fixed charges might total $50-$150 per month across electric and gas service. This represents your minimum monthly energy bill even if you somehow used zero energy. Understanding this "floor" helps with:

• Budgeting for seasonal businesses with variable usage
• Evaluating whether to maintain service at low-use locations
• Understanding why conservation alone can't eliminate energy costs

Your Power to Save: How Variable Energy Costs Are Your Biggest Opportunity to Lower Your Bill

While fixed costs represent an unavoidable baseline, variable costs are where you have significant control. These charges fluctuate based on your consumption, making them the primary target for cost-reduction strategies.

Variable Electric Charges

Variable Natural Gas Charges

Why Variable Costs Matter Most

For most commercial customers, variable costs represent 70-90% of the total energy bill. This means:

• A 10% reduction in energy consumption translates to 7-9% reduction in total bill
• Competitive supply shopping can reduce the largest cost component
• Demand management for electric users offers substantial savings potential
• Energy efficiency investments yield ongoing returns through reduced variable costs

The Demand Charge Factor

For commercial electric customers with demand metering, demand charges can represent 30-50% of your electric bill. These charges are based on your highest 15-minute usage period during the billing cycle. Key points:

• A single peak can set your demand charge for the entire month
• Demand is "ratcheted" in some rate schedules, meaning high peaks affect future bills
• Managing demand requires understanding when and why peaks occur
• Load shifting and peak shaving can significantly reduce these charges

Take Control: 3 Proven Strategies to Slash Your Illinois Commercial Energy Spend Today

Now that you understand which costs you can influence, here are three proven strategies for reducing your Illinois commercial energy spend:

Strategy 1: Shop for Competitive Supply Rates

The energy supply portion of your bill is fully competitive in Illinois. This is often your largest variable cost and your greatest opportunity for immediate savings:

• Get Multiple Quotes: Request quotes from 5-7 licensed suppliers
• Compare Apples to Apples: Ensure quotes cover the same terms and components
• Consider Fixed Rates: Lock in favorable rates when market conditions allow
• Aggregate Accounts: Combine multiple locations for better pricing
• Review Contract Terms: Avoid hidden fees and unfavorable clauses

According to the Illinois Commerce Commission, active shoppers consistently save compared to utility default rates.

Strategy 2: Reduce Energy Consumption

Every kWh or therm you don't use eliminates both supply and delivery variable costs:

Many Illinois utility rebate programs can offset the cost of efficiency investments.

Strategy 3: Manage Peak Demand

For commercial customers with demand charges, peak management offers significant savings:

• Identify Peak Causes: Analyze when and why your highest demand occurs
• Stagger Equipment Startup: Avoid simultaneous startup of major loads
• Shift Loads: Move energy-intensive operations to off-peak hours
• Install Controls: Demand limiting controllers can prevent peaks automatically
• Consider Storage: Battery or thermal storage can shave peaks

Frequently Asked Questions

Conclusion: Focus Your Efforts Where They Count

Understanding the difference between fixed and variable utility charges helps you develop effective cost-reduction strategies. While you can't eliminate fixed charges like the customer charge, variable costs offer significant opportunities for savings through competitive supply shopping, energy efficiency, and demand management.

Key takeaways:

• Customer charges are fixed costs you pay regardless of consumption
• Variable costs (per-kWh and per-therm charges) are where savings opportunities exist
• Demand charges significantly impact commercial electric bills
• Shopping for competitive supply rates addresses your largest variable cost
• Energy efficiency and demand management reduce variable costs on an ongoing basis

Businesses in Chicago, Aurora, Joliet, and throughout Illinois can apply these principles to take control of their energy costs.