A Commercial Guide to Con Edison's Primary Rate Classes

Why is it more expensive to power a facility in Manhattan than Queens, even if you use the same amount of electricity? For commercial customers in Con Edison territory, costs are shaped not just by kilowatt-hours used, but also by location, building type, and how power is consumed. These factors are reflected in the categories Con Edison uses to price energy and demand – commonly called rate classes. 

Understanding these categories can help demystify your energy bill and reveal what’s driving changes or spikes in your monthly charges. Here’s a breakdown of what commercial customers need to know. 

 Service Categories and How They Affect Your Bill 

Con Edison assigns customers to different rate classes based on their facility’s demand, usage patterns, and size. These categories matter because they determine how you’re charged for both energy and demand on every bill, not just which label appears on your account: 

• Smaller Businesses: Businesses with lower energy demand, typically under 10 kW, like small offices or retail locations typically pay simpler, more predictable rates.  

• Mid-Sized Commercial Facilities: Buildings with moderate demand – often multi-tenant offices, restaurants, or facilities with motors, elevators, or larger HVAC systems. Rates often include time-of-use or demand-based components, so sharp spikes in usage can create higher bills. 

• Large or Industrial Facilities: High-demand facilities, with heavy machinery, large motors, process loads, or extensive HVAC. Demand charges during peak periods can significantly increase the monthly bill, especially during hot summer days or other peak-use periods. 

Charges and How They Add Up 

• Energy Charges: 
  This is the cost of actual electricity used, which varies depending on your rate plan—fixed, variable, or time-of-use. Energy used during peak hours usually costs more. 

• Delivery Charges: 
  Con Edison incurs costs for transmitting electricity from the grid to your building. Delivery rates also differ by location and building type, with Manhattan typically higher due to infrastructure and demand. 

• Demand Charges: 
  A key factor in your bill, demand charges are based on your peak power (kW) during the billing cycle. High-demand equipment like motors, chillers, rooftop units, or extensive HVAC can trigger spikes in these charges. 

• Zone-based Pricing: 
  Zones like Manhattan (Zone J) have higher rates due to density and infrastructure costs, while less dense areas are typically cheaper. 

What Causes Rate Spikes? 

The main drivers are short-term spikes in demand during peak hours, often caused by: 

• High-power equipment operating simultaneously (motors, chillers, HVAC) 

• Changes in usage patterns (longer operational hours, new office equipment) 

• Increased occupancy or seasonal demands 

Businesses can manage these costs by: 

• Monitoring peak demand to identify when spikes occur and shifting non-essential energy use off-peak. 

• Optimizing operations to avoid coinciding high-demand periods. 

• Working with an energy supplier to understand how your category impacts billing and explore strategies aligned with your load profile. 

Key Takeaways 

Con Edison’s commercial categories directly shape how much you pay for energy and demand each month. Small offices, mid-sized multi-tenant buildings, and large industrial facilities each have different levers to manage costs. Working with an energy supplier helps you align supply contracts and operational strategies with your facility’s usage profile, whether that means locking in predictable pricing, pairing supply with on-site generation, or smoothing out peak demand. 

The right partner can turn knowledge of your rate category into a concrete strategy to control costs and avoid surprise charges. 

Contact our Energy Experts today to learn how our retail electricity plans can support your energy strategy.