Understanding Billing Options from ESCOs Serving Commercial Customers

When’s the last time you really looked at your energy bill? For many businesses, “paying the bill” is just another box to check - until you realize how your bill is structured could impact your cash flow or create avoidable admin headaches. While not all businesses get to choose how they're billed, understanding the difference between consolidated and dual billing through your ESCO can help you better manage costs and anticipate your payment process. The difference isn’t just paperwork—it can directly affect your bottom line.  

What’s the Difference Between Consolidated and Dual Billing? 

When you choose a supplier, like Catalyst Power, for your electricity and natural gas supply, you may receive your bills in one or two ways:  

• Consolidated billing: You get a single bill from your utility, which rolls together delivery (the utility’s wires and service) with your ESCO’s supply charges—one statement, one payment. You pay everything to the utility, and they pass on the supply payment to your supplier. 

• Dual billing: You receive two separate bills. The utility bills for delivery and the ESCO bills for the energy supply. You pay each party directly. 

Depending on where your business is located and your utility’s billing arrangements, you might not have a choice. But if you do, it’s worth considering the pros and cons. 

Payment Flow, Fees, and Credit 

For commercial energy customers, the way you get billed can significantly affect your billing process, costs, and payment risk. 

• Consolidated billing: You receive a single bill from your utility that includes both delivery and your energy supplier’s charges. The utility collects your full payment and then pays your supplier through a process called Purchase of Receivables (POR). This means the utility assumes the risk of collecting from you, so the supplier is guaranteed payment regardless of when you pay. However, the utility charges the supplier a POR or billing fee, which is typically passed along to customers, resulting in slightly higher consolidated supply rates. One advantage is that you avoid a credit check by your supplier because the utility handles collections. 
  
  
• Dual billing: You receive two separate bills, one from the utility for delivery and one directly from your energy supplier for supply. Your supplier collects payment directly, so they usually require a credit check upfront. Because there’s no utility POR fee involved, suppliers can often offer lower supply rates. However, this billing method requires you to manage two bills, which adds administrative complexity and increases the chance of missed payments. If you pay your supplier late or not at all, your energy supply could be shut off, unlike consolidated billing, where only the utility delivery might be interrupted for nonpayment. 

Pros and Cons of Consolidated Billing 

Pros 

• One bill, one payment: Simplifies accounting and payment processes for businesses. 

• No credit check by the ESCO: Utilities handle collections, easing the process for customers. 

• Lower risk of supply interruptions: Utilities handle late payments and shutoffs. 

Cons 

• Slightly higher rates: The utility’s billing or POR fee makes supply rates a bit higher than dual billing alternatives. 

• Less detailed supplier billing: Supply details are aggregated on the utility bill. 

Pros and Cons of Dual Billing: 

Pros 

• Potentially lower supply rates: Since ESCOs avoid the utility’s billing/POR fee, they may offer better pricing. 

• Possible flexible payment terms: Larger businesses may negotiate flexible or extended payment schedules directly with their ESCO. 

• Detailed supply information: Suppliers can present more detailed breakdowns and track usage in greater detail, which is helpful for complex contracts or energy management projects. 

Cons 

• Extra complexity: Juggling two bills increases admin work and the chance of missed payments. 

• Supplier credit check required: May require credit approval before service starts.  

• Risk of supply shutoff: Late supplier payments can result in energy supply interruptions. 

Knowing Your Options and the Path Forward

In many cases, your utility dictates the available billing structure. Some utilities allow both consolidated and dual billing, while others support only one format. Your supplier (like us here at Catalyst Power) can clarify which options are available to you. 

Need more information? Contact our Energy Experts today to learn more about our retail electricity plans and how they can help your business hedge against market volatility.