Fixed vs. Variable Charges sit at the center of how your commercial electricity rate behaves and how predictable your energy budget actually is.

This is Energy Decision #6 in the complete C&I energy management series from Tactical Energy Group. 100 decisions. Every one that matters.

In this episode, Daniel Burke covers:

• The basic bill components: energy charges, demand charges, and fixed charges
• What “fixed charges” really are on a commercial utility bill
• What counts as variable charges: energy charges, fuel riders, and other per‑kWh items
• How demand charges, time‑of‑use (TOU), and demand ratchets fit into fixed vs. variable thinking
• The difference between bundled and unbundled utility rates for C&I operators
• Why load factor is the master metric tying kW and kWh together
• When more fixed cost can actually help budget predictability
• When exposure to variable charges creates damaging budget volatility
• Why “fixed is good, variable is bad” (or the reverse) is the wrong question
• A practical process to analyze your rate structure and choose what fits your operation

Who this is for: plant managers, facility managers, COOs, energy managers, and finance leaders at commercial businesses, industrial facilities, manufacturers, educational institutions, healthcare providers, and retail operations who are trying to balance energy cost savings with budget predictability.

If you're asking which commercial utility rate structure, fixed or variable, offers the best balance of cost savings and budget predictability for your operation, this episode is for you.

Visit tac-nrg.com to learn more and get practical tools for your facilities.

Chapters

00:00 Understanding Electric Bills: Fixed vs. Variable Charges

02:46 Decoding Fixed and Variable Charges

05:32 Demand-Based vs. Power-Only Rates

08:25 When Fixed Charges Benefit Operations

11:29 The Role of Load Factor in Rate Structures

14:17 Practical Steps for Analyzing Rate Structures

16:59 Strategic Advantages in Understanding Utility Rates

20:13 Energy Decision Blueprint for Rate Decisions

Fuel Adjustment Charges and Riders (Part 1 of 2) are variable line items on commercial and industrial electricity bills that pass through changing fuel costs and can create serious budget volatility if you are not tracking them.
This is Energy Decision #5 in the complete C&I energy management series from Tactical Energy Group. 100 decisions. Every one that matters.

In this episode, Daniel Burke covers:

• Fuel Adjustment Charges (FACs) and riders and where they show up on your utility bill
• How base fuel costs are set in a rate case and why FACs exist on top of base rates
• How utilities calculate FAC rates and apply them as cents per kilowatt-hour
• Why FACs create budget volatility and planning headaches for manufacturers and other C&I customers
• Common misconceptions about FACs, including whether utilities “profit” from them
• Key metrics to track: FAC rate, share of total bill, generation mix, and commodity trends
• How utility asset decisions can overexpose you to volatile fuel costs
• Practical steps to start tracking FAC behavior over time in your own operation
• When fuel adjustment charges are a relatively small nuisance versus a serious competitive disadvantage
• How to think about mitigation options that will be covered in Part 2

Who this is for: plant managers, facility managers, superintendents, COOs, and energy managers at manufacturers, commercial real estate portfolios, data centers, educational institutions, and healthcare facilities who are tired of unpredictable fuel adjustment charges wrecking their electricity budgets.

If you're trying to figure out how to mitigate the financial impact of fluctuating fuel adjustment charges on your energy budget, this episode is built for you.

Visit tac-nrg.com to learn more and get practical tools for your facilities.

If you're getting ready to put your name on a major energy project and need to make sure it's right, sign up for our Energy Decision Blueprint before you submit your business case. Get your Energy Decision Blueprint here: TAC-NRG Energy Decision Blueprint

0:00 – What are fuel adjustment charges and riders on C&I bills?
3:40 – Why utilities use fuel adjustment mechanisms on top of base rates
8:15 – How fuel adjustment rates are calculated and applied per kilowatt-hour
13:05 – Why FACs create budget volatility for manufacturers and other C&I operators
18:50 – Common misconceptions about fuel adjustment charges and riders
24:20 – Key metrics to track for fuel adjustment charges and bill exposure
29:10 – When fuel adjustment charges reflect good asset management vs ideological choices
34:30 – First steps this week to understand your facility’s exposure to fuel adjustment charges
38:55 – Morning huddle questions and how the Energy Decision Blueprint helps with FAC exposure

Power factor penalties are one of the least understood and most overlooked charges on a commercial and industrial electricity bill — and for facilities running inductive loads like motors, transformers, and HVAC systems, they can add thousands of dollars monthly to a bill the operator has never been shown how to read.

This is Energy Decision #04 in the complete C&I energy management series from Tactical Energy Group. 100 decisions. Every one that matters.

In this episode, Daniel Burke covers:

— What power factor is and how real power (kW), reactive power (kVAR), and apparent power (kVA) create the financial exposure most C&I operators never see coming

— The three primary utility penalty mechanisms for low power factor: percentage surcharges on demand, excess kVA billing, and kVARh charges

— and how each inflates your monthly bill

— Why a facility measuring 1,000 kW of real power at 80 percent power factor may be billed for 1,250 kW of demand and what that costs annually

— How poor power factor artificially inflates billed demand above metered demand, increasing your all-in cost per kilowatt-hour

— The real-world benefits of power factor correction: eliminated penalties, reduced kVA demand charges, increased transformer and switchgear capacity, reduced I²R losses, and extended equipment lifespan

— The four types of correction equipment

— fixed capacitors, automatic power factor correction banks, detuned filter banks, and active harmonic filters — and how to select the right one for your facility's load profile

— Why harmonic analysis is non-negotiable before installing any capacitor bank, and what happens when it is skipped

— The overcorrection risk: why 100 percent power factor is not the target, and why a leading power factor can trigger its own utility penalties

— The most dangerous and least discussed post-installation failure: capacitor banks off at the breaker while power factor penalties continue to accrue undetected for months

— Why utilities have a structural financial incentive to never help their C&I customers correct power factor — and what that means for your energy management strategy

Who this is for: plant managers, facility managers, COOs, maintenance directors, and energy managers at manufacturing plants, chemical facilities, cold storage operations, and large industrial facilities who want to understand whether their utility rate penalizes low power factor and whether correction would materially reduce their monthly electricity costs.

If you are trying to understand how to effectively identify, calculate, and implement power factor correction strategies to eliminate utility penalties and optimize electricity costs in your facility, this episode is built for you.

Read the full breakdown on Power Factor Penalties and Correction Strategies at tac-nrg.com/power-factor-penalties-correction.

If you're an Indiana C&I operator actively evaluating this decision, get your free Energy Decision Blueprint at blueprint.tac-nrg.com.

Visit tac-nrg.com to learn more and get practical tools for your facilities.