When a large industrial plant wants electricity, it often does not pay the same price a household pays. It can negotiate special contracts, accept interruptible or curtailable service in exchange for lower rates, or take service under tariffs designed for high-load-factor customers. It frequently pays rates closer to wholesale costs.

Households and small businesses typically face average retail rates that include distribution costs, riders, and surcharges, with no opportunity for negotiation. Industrial rates nationally run roughly half of residential rates, not solely because of volume discounts, but because it genuinely costs less to serve large, steady loads at higher voltages.

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