Energy Tariff and Rate Optimization Playbook

Reduce utility costs by ensuring each account is on the right rate plan and you're not paying avoidable charges

Run the OperationPlaybook45 min

This playbook is bottom-line first:

  • Cost reduction: avoid overpaying due to wrong tariff, rate plan mismatch, demand spikes, penalties/fees, and preventable billing issues
  • Risk mitigation: fewer disputes, stronger auditability, fewer surprise spikes, cleaner utility governance
  • Carbon impact (secondary): better usage data quality improves Scope 2 reporting, but this playbook is not "carbon-first"

Beginner rule: This is not about becoming a utility expert. It's about running a repeatable system that catches mistakes and forces the best available rate structure for your reality.

Who this is for

  • Operators, finance/AP, and procurement leaders who pay utility bills and want lower cost and fewer surprises
  • Anyone who needs a repeatable "utility review" motion across multiple sites

You do not need specialized energy modeling to get value from this.

What "tariff" means in plain English

A tariff (or rate schedule / rate plan) is the utility's rulebook for how you're billed. It determines:

  • •Supply vs delivery charges
  • •Whether you pay demand charges (kW)
  • •Whether rates change by time of day (TOU / time-of-use)
  • •Which fees apply and how penalties show up

Most overpayment comes from:

  • • the wrong tariff for your load profile
  • • avoidable demand spikes
  • • expensive riders/fees you didn't notice
  • • estimated reads and corrections that create billing weirdness
  • • accounts not aligned to occupancy/operations changes

Outcomes you should expect

If you run this playbook consistently, you should get:

  • Fewer unexplained bill spikes
  • Fewer billing errors surviving approval
  • A prioritized list of "top accounts to optimize"
  • A clean pipeline of rate/tariff actions
  • A defensible record of decisions and disputes

Quickstart: the "30-minute first pass"

Do this today for your top 5 electricity accounts by annual $.

  1. 1Pull the most recent utility bill for each account
  2. 2

    Capture (from the bill):

    • • tariff / rate schedule name
    • • billing period start/end
    • • total kWh
    • • total $
    • • peak kW (if present)
    • • demand charges $ (if present)
  3. 3

    Compute:

    • • effective $/kWh = total $ ÷ total kWh
    • • demand share = demand charges $ ÷ total $
  4. 4

    Flag:

    • • high demand share
    • • cost spikes without usage spikes
    • • unknown tariff name
  5. 5Put those accounts into the Action Tracker (template below)

That alone gets you leverage and visibility fast.

The 7-step playbook

1Build the account roster

You cannot optimize what you can't list.

Create a roster for each site + utility type:

  • • electricity
  • • gas
  • • water (optional)

Capture account #, provider, and who owns payment/approvals.

2Normalize the bill dataset monthly

Each bill should produce one standardized row:

  • • period start/end
  • • usage
  • • cost
  • • evidence link

If you can't standardize this, you can't compare month-to-month.

3Identify what drives the bill

For electricity, bills typically have:

  • • energy usage (kWh) charges
  • • demand (kW) charges (sometimes the big driver)
  • • fees/riders (misc charges that can be meaningful)
  • • taxes

Two key patterns:

  • • High demand charges → your peaks are costing you
  • • Cost spike without usage spike → rate plan / fees / error are likely

4Triage accounts (which ones matter first)

Prioritize accounts where:

  • • annual spend is high
  • • demand charges are a big share
  • • TOU penalties are likely
  • • there were recent operational changes (new tenant, new operating hours, equipment changes)
  • • billing anomalies repeat

5Rate plan / tariff options review

This is the part where you ask: "Is this the correct tariff?"

Beginner-safe way to run this:

  • • confirm the current tariff name and eligibility requirements (from the utility)
  • • request a comparison (utility rep, broker, or internal analyst) between current tariff and alternative tariffs that you qualify for
  • • compare outcomes using your last 12 months of bills

Watch-outs (real world):

  • • "Cheaper energy rate" can be offset by worse demand charges
  • • moving to TOU can increase costs if you can't shift load
  • • some tariffs have demand ratchets (a single peak haunts you for months)
  • • changing tariffs can have restrictions or lock-in periods

6Implement changes safely

If you switch tariffs/rate plans:

  • • document the effective date
  • • document the expected impact and assumptions
  • • ensure metering configuration supports the tariff (especially TOU)
  • • track the first 2–3 bills post-change as a verification window

7Verify savings and close the loop

Savings aren't real until they show up on bills.

  • • create a baseline period (e.g., prior 12 months)
  • • compare normalized cost metrics ($/kWh, demand $/kW, total $)
  • • document external drivers (weather/occupancy/operating hours)
  • • record realized savings with evidence links

Common savings levers (plain English)

A

Wrong tariff / rate schedule

If your building's load changed, your tariff may be obsolete.

B

Demand charges

A few minutes of peak demand can drive huge cost.

C

TOU penalties

Running heavy loads at peak hours increases $.

D

Fees, riders, and penalties

Late fees, "misc riders," and one-time penalties often slip through.

E

Billing errors

Wrong meter, duplicate bills, estimated reads causing weird corrections.

Templates

Utility Tariff Snapshot Card (per account)

Utility Tariff Snapshot Card

Site:
Provider:
Account #:
Tariff / rate schedule name:
Billing frequency:
Billing period (latest):
Total kWh:
Total $:
Peak kW (if shown):
Demand charges $ (if shown):
Notes (TOU? riders? penalties?):

Key metrics:
- Effective $/kWh = total $ ÷ total kWh
- Demand share = demand charges $ ÷ total $

Current concerns (pick up to 3):
[ ] High demand share
[ ] Unexplained cost spike
[ ] Tariff unclear/unknown
[ ] Fees/penalties present
[ ] Estimated reads / true-up volatility
[ ] Operational change not reflected

Next action:
Owner:
Due date:
Evidence link:

Monthly Utility Bill Intake Log (minimum viable)

| Month | Site | Provider | Account # | Tariff name | Period start | Period end | kWh | Peak kW | Total $ | Demand charges $ | Fees/penalties $ | Evidence link | QA status (OK/Flagged) | Notes |
|-------|------|----------|-----------|-------------|--------------|------------|-----|---------|---------|------------------|------------------|---------------|------------------------|-------|
|       |      |          |           |             |              |            |     |         |         |                  |                  |               |                        |       |

Tariff Change Evaluation Table

| Site | Account # | Current tariff | Proposed tariff | Why change? | Expected impact (plain English) | Risks | Decision (Go/No-go) | Owner | Target effective date | Notes |
|------|-----------|----------------|-----------------|-------------|--------------------------------|-------|---------------------|-------|----------------------|-------|
|      |           |                |                 |             |                                |       |                     |       |                      |       |

Root Cause Tags for anomalies

Use these tags so problems get solved, not relabeled:

• billing error (duplicate / wrong meter / wrong tariff)
• estimated read / true-up
• operational change (hours/occupancy/process)
• equipment issue (HVAC stuck, leak, etc.)
• weather/seasonality
• demand event (peak)
• rate plan/tariff change
• one-time fee/penalty

Utility dispute email template

Subject: Billing dispute — [Site] — Account [#] — Bill period [start–end]

Hello,
We are disputing charges on the bill for:
- Site: [Site]
- Account #: [Account #]
- Billing period: [start–end]
- Bill date: [date]
- Amount in question: [$]

Issue summary:
- [Duplicate bill / wrong meter / incorrect rate plan / unexplained fees / incorrect period]

Requested resolution:
- Please investigate and provide a corrected bill or credit.
- Please confirm the expected timeline for resolution.

Attachments:
- Bill PDF
- Supporting evidence (if any)

Thank you,
[Name]
[Title]
[Company]

Utility rate optimization action tracker

| Date opened | Site | Account # | Issue type (Tariff/Demand/TOU/Fee/Error) | Estimated $ impact | Owner | Next step | Due date | Status | Evidence link |
|-------------|------|-----------|------------------------------------------|-------------------|-------|-----------|----------|--------|---------------|
|             |      |           |                                          |                   |       |           |          |        |               |

Recommended cadence

Monthly (30 minutes)

  1. 1. bills ingested + QA completed for top accounts
  2. 2. anomalies tagged and owners assigned
  3. 3. disputes progressed and credits tracked
  4. 4. tariff optimization actions reviewed

Quarterly (60 minutes)

  1. 1. top accounts tariff review (are we still on the right plan?)
  2. 2. demand and TOU patterns review
  3. 3. prioritize next quarter's top 3 utility savings initiatives

Definition of Done

You've implemented tariff and rate optimization correctly when:

  • Every major account has a known tariff name and evidence link
  • Monthly bills produce standardized rows (period, usage, cost)
  • Anomalies are tagged, owned, and resolved (or documented as real)
  • Tariff change decisions are documented with risks and assumptions
  • Disputes close with credits actually received/applied
  • Realized savings are proven with bill evidence (not just forecasts)

Change log

v1.0 (2025-12): Latest release