How to lower your business electric bill in California (PG&E and SCE)
Start with what you use, when you use it and how your tariff bills it. Efficiency, eligible rate options, supply choices and battery storage work on different parts of a PG&E or SCE bill.
What runs a commercial electric bill up the most?
Often the demand charge, especially for facilities with sharp peaks. On most commercial and industrial rates, the single highest 15 minutes of power use in the month is billed per kilowatt, so one short peak can set a large share of the whole bill.
30.02¢
Average California commercial price per kWh, August 2026 (preliminary). The U.S. average was 14.47¢.
$83.53
Per kW, what a summer peak between 4 and 9 pm costs on PG&E B-19: $37.37 all-hours demand plus $46.16 peak-period demand, secondary voltage, bundled service, from March 1, 2026. This combines those two components; part-peak demand is billed separately, and the maxima may occur at different times.
Start with a full year of bills and interval data
Separate generation and delivery, then identify the energy charges in kWh and demand charges in kW. Demand and time-of-use describe how those costs are billed; they are not separate layers to add twice.
Compare your current operation under every eligible rate and supply option first. Then model efficiency, load shifting, solar or storage against that baseline, including fees, event charges and any remaining monthly demand charges.
Eight ways to lower a California business electric bill
Ranked roughly from least effort to most, not by size of saving. Most facilities use several.
01
Efficiency and LED
Lowers:EnergyDemand
What it can do
Lighting, variable-speed drives, compressed-air repairs and better controls cut kWh every hour, at California’s high per-kWh prices. PG&E, SCE and state-funded programs offer rebates and financing for many projects.
What to watch
Savings depend on which equipment is upgraded and whether it runs during your billed peak. Efficiency can lower both kWh and peak kW, but it may leave other large loads unchanged.
02
Choose the right rate and option
Lowers:DemandEnergyFixed
What it can do
PG&E and SCE offer several rates and options for the same facility, with different balances of demand and time-of-use energy charges. On PG&E, B-10, B-19 and B-19 Option S can bill the same plant very differently; SCE’s TOU-8 and TOU-GS-3 have options too.
What to watch
Eligibility, storage requirements and enrollment caps can limit the options available. Model a full year before switching, including all monthly and daily demand charges. Adding solar or storage can change the comparison.
03
Compare CCA and Direct Access supply
Lowers:Energy
What it can do
Many California businesses already buy generation from a community choice aggregator such as Ava Community Energy or Clean Power Alliance. Comparing its generation price with the utility’s, or Direct Access where it is open, can lower the energy part of the bill.
What to watch
Delivery and most demand charges stay with PG&E or SCE whoever supplies you, and leaving the utility brings an exit fee (the PCIA). Peak Day Pricing is only open to utility-supplied customers.
04
Move flexible load out of 4–9 pm
Lowers:EnergyDemand
What it can do
Many PG&E and SCE business tariffs price 4–9 pm highly and include time-related demand charges. Check the actual schedule, season and weekday rules. Running batch processes, pre-cooling or charging fleets earlier cuts both.
What to watch
It works only for load that can move. Shifting into the midday hours can also create a new all-hours peak if everything restarts at once.
05
Stagger start-ups so spikes don’t stack
Lowers:Demand
What it can do
Where production allows, starting compressors, chillers or ovens in turn can reduce overlapping warm-ups during the intervals your tariff bills.
What to watch
Another busy interval can still set a higher billed peak. Check all-hours and time-related demand charges separately, and include any minimum billing demand or power-factor rules.
06
Plan for Peak Day Pricing
Lowers:EnergyDemand
What it can do
Peak Day Pricing is the default for eligible PG&E B-19 customers on utility supply: credits on summer peak and part-peak demand charges, in exchange for an additional $0.90 per kWh on usage from 4–9 pm on 9 to 15 event days a year. Compare credits and event charges over a full year to see whether it benefits your facility. SCE has a similar critical peak pricing option.
What to watch
Event days are called the afternoon before and often fall on the hottest days, when cutting load is hardest. If you cannot respond, opting out may cost less.
07
Solar
Lowers:Energy
What it can do
Solar cuts daytime kWh at some of the highest energy prices in the country. Under the Net Billing Tariff, self-consumption offsets purchased energy while exports receive separate credits. Compare those values against your daytime load and the applicable export schedule.
What to watch
Solar output falls during the evening window. Its effect on demand depends on output during the interval that sets the billed peak. Model self-consumption, export credits and any storage against your own tariff.
08
Battery storage
Lowers:DemandEnergy
What it can do
A battery covers the peaks that set the all-hours and 4–9 pm demand charges and shifts energy out of the evening window, without changing operations. Paired with solar, it can store midday output for later use, subject to system size, operating limits and tariff rules. A first-pass screen usually puts the saving at about 1–4 months of the electric bill a year, but it varies a lot by site and is hard to know without a full analysis. Your free assessment shows the real number for your facility. With purchase, 2–3 year payback for most customers, before tax benefits.
What to watch
All-hours, peak and part-peak charges can reward different operating choices, and the right rate option changes once a battery is installed. A battery can also run out on a long peak. QoreAI re-plans every 15 minutes from what it sees at the site, so it adapts to new equipment, shifts and unexpected load. Payback includes on-bill savings and utility program revenue; excludes federal tax credits and depreciation. Actual results vary by facility.
How peak shaving works What commercial battery storage costs
Tips and tricks to lower your demand charge
The demand charge is the part of your bill set by your highest spike. These habits keep spikes down for free. The first matters most; try it below.
01
Don’t start big equipment at the same time
Bring compressors, furnaces, ovens, chillers and EV chargers on one after another, a few minutes apart, so their start-ups don’t stack into one 15 minutes.
02
Watch the Monday-morning restart
After a weekend or a shutdown, HVAC, process heat and air all pull hard together. That 7 am Monday spike often sets the month.
03
Move flexible loads out of 4–9 pm
Batch runs, pre-cooling, charging and tests that can run earlier or later cost less there, and on many rates only spikes inside the demand hours count.
04
Read the demand line every month
The kW figure on your bill tells you whether a spike set the charge. Catching it the month it happens is how a habit sticks.
- Lights and base load
- Oven or furnace heat-up
- Chiller pull-down
- HVAC after the weekend
- Air compressor start-up
- Highest 15 minutes
- 435 kW
- What the meter bills
- Demand charge vs all at once
- 0%
- It scales with the billed peak
The highest 15 minutes average 435 kW, starting at 7:00 am. Every start-up lands in the same interval.
Started together, the warm-ups stack to 435 kW. Started in turn from 5:00 am, the same machines peak at 280 kW, a 36% smaller demand charge.
Illustrative loads. A motor’s start-up surge lasts seconds and barely moves a 15-minute average; what sets the charge is several machines working hard through the same quarter-hour, like a warm-up after a weekend.
Staggering loads can lower demand when it reduces the intervals your tariff bills. Production schedules may limit what you can move, and another busy interval can still set a higher peak. A battery can supply part of that short burst of power, reducing the draw at your meter while equipment keeps running. The result depends on your load, tariff and system size.
Why it is harder than a list
We compare eligible rates and supply choices against a year of bills and interval data, then weigh bill savings and system costs together. QoreAI re-plans every 15 minutes from what it sees at the site, so it adapts to new equipment, shifts and unexpected load.
01
Several demand charges, one battery
An all-hours peak, a peak-period maximum and a part-peak maximum can occur at different times and be billed separately. The energy saved for one is not there for the other unless the battery is managed for both.
02
The rate depends on the equipment
Adding solar or storage can make a different rate option the cheapest one. Size the system and choose the rate together, not one after the other.
03
Event days and rate changes
Peak Day Pricing events, rate changes and CCA price updates arrive through the year. A plan set once at install drifts out of date.
Compare the cost after savings and benefits
Compare the annual bill after savings alongside system costs, eligible benefits and your ownership agreement. A lower headline price or one cheap month is not enough to judge the whole offer.
Model the benefits your facility can actually keep. Check incentive eligibility, export rules, provider fees and the performance needed to earn credits before including them in the comparison.
Explore your options
Questions about lowering a California electric bill
Is there a trick to cutting a business electric bill in half?
No single one. The biggest savings come from combining levers that each work on a different part of the bill: efficiency for the kWh, the right rate and supply for the price, and moving load or adding storage for the 4–9 pm window and the demand charges. How much is possible depends on how much of your bill is demand charges.
How can a business lower its electric bill in California?
Start by splitting the bill into energy, demand and fixed charges. Then work through efficiency, the right PG&E or SCE rate option, CCA or utility supply, moving flexible load out of 4–9 pm, Peak Day Pricing and, for facilities with large demand charges, battery storage.
Can a business cut its electric bill by 75 percent?
Rarely, and claims like that deserve a close look. Some charges, such as fixed account fees, may remain even when you reduce energy use. Realistic results come from stacking several levers, and the honest way to size them is to model a year of your own interval data.
Why are commercial electricity rates so high in California?
The EIA put the average California commercial price at 30.02¢ per kWh in August 2026, about twice the U.S. average of 14.47¢. The CPUC names three main drivers: wildfire costs, distribution spending and rooftop solar incentives. Evening peaks are priced high to keep the grid reliable as solar fades.
What is PG&E Peak Day Pricing?
A default option for eligible B-19 customers on PG&E supply. You receive credits on summer peak and part-peak demand charges, and pay an additional $0.90 per kWh on top of ordinary energy charges for usage from 4 to 9 pm on 9 to 15 event days a year, announced the day before. You can opt out. CCA and Direct Access customers are not eligible.
Should my business stay with a community choice aggregator or PG&E supply?
Compare the generation price including the exit fee (PCIA) and franchise fees, not the headline rate. Remember what does not change: delivery and most demand charges are billed by PG&E or SCE either way, and some options such as Peak Day Pricing are only open to utility-supplied customers.
We run 24/7 with a flat load. Does a battery still help?
Less than for a peaky plant. A battery saves by cutting spikes above your normal load, and a flat load has few. On a time-of-use rate it can still shift energy out of 4–9 pm, so it is worth a look, but some round-the-clock facilities are not a fit, and we will say so.
Our shift ends at 4 pm. Don’t we already miss the peak hours?
For the 4–9 pm charges, mostly yes, and that is worth a lot in California. But tariffs such as PG&E B-19 also include an all-hours demand charge, so a morning spike can still count. Other schedules and options have different rules.
Can a battery handle CNC machines, welders or presses?
Your machines keep running from the grid as they do today. A behind-the-meter battery connects at the facility’s service and covers part of the combined load when it rises above a target, so short, sharp loads are fine as long as the system is sized for the power they add.
Most of our energy is natural gas. Does this apply?
Only to the electric bill. A battery and load shifting lower electric demand and time-of-use charges, not gas costs. If the electric bill is small, the saving will be too: the screen we use is facilities spending $10K+ a month on electricity.
We are on a municipal utility such as SMUD or LADWP. Does this apply?
It depends on the utility’s own rates. Municipal utilities are not regulated by the CPUC, so PG&E and SCE schedules, Peak Day Pricing and CPUC programs do not apply. Many still bill demand charges, so it is worth checking your rate.
How much can a battery save a California business?
It depends on how peaky your load is, how much of it falls in 4–9 pm and which rate you are on. A first-pass screen usually puts the saving at about 1–4 months of the electric bill a year, but it varies a lot by site and is hard to know without a full analysis. Your free assessment shows the real number for your facility.
What is PG&E Option S?
An option on PG&E business rates for facilities with qualifying battery storage. It replaces some monthly time-related charges with daily demand charges, while monthly maximum-demand charges remain. A missed peak can therefore affect the day’s charge and a monthly maximum. Check qualifying storage requirements, enrollment capacity and a full year of costs before switching.
Sources (6)· Last reviewed October 26, 2026
- CPUC, Net Energy Metering and Net Billing (opens in a new tab)
- PG&E, commercial battery storage and Option S enrollment (opens in a new tab)
- U.S. EIA, Electric Power Monthly, Table 5.6.A (opens in a new tab), August 2026, preliminary
- PG&E Electric Schedule B-19: rates Sheet 4 (Cal. P.U.C. 61071-E), Option S rates Sheet 11 (61078-E), time periods Sheet 15 (57123-E), Option S terms Section 20, Sheet 23 (57131-E). Advice 7846-E, effective March 1, 2026 (opens in a new tab), effective March 1, 2026, including Peak Day Pricing
- CPUC, 2025 SB 695 Report (opens in a new tab), main drivers of rate increases
- CPUC, subjects not regulated by the CPUC (opens in a new tab), municipal utilities
Take control of your power
Find out which levers pay at your facility
Send a recent PG&E or SCE bill. We compare your demand charges, time-of-use costs, eligible rate options and supply choices to show where your facility could lower its electricity costs.